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Gross Domestic Product, Education, Unempoyment and Poverty: Evidence from South Sumatera Province, Indonesia

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Gross Domestic Product, Education, Unempoyment and Poverty: Evidence from South Sumatera Province, Indonesia Jurnal Media Ekonomi (JURMEK) Vol. 25, No. 3 Desember 2020 p-ISSN : 1693-4768, e-ISSN : 2656-8861 GROSS DOMESTIC PRODUCT, EDUCATION, UNEMPOYMENT AND POVERTY: EVIDENCE FROM SOUTH SUMATERA PROVINCE, INDONESIA Muhammad Yusuf Business Administration Department, Business Management Study Program, Polytechnic State of Sriwijaya E-mail : [email protected] Abstract This study determine the effect of Gross Domestic Product (GDP), education level and unemployment rate on the poverty in the South Sumatra Province in year of 2013 – 2018. The method uses panel data analysis using Eviews program with combination time-series data and cross-section data using panel data through fixed effects Model. The data obtained from the Central Statistic Bureau of Indonesia. The results showed that the GDP variable and the education level are negative and significant effect on poverty in the South Sumatra Province, the unemployment level is positive and significant effect on poverty in the South Sumatra. The information and the policy considerations related parties to improve the system of growth and development in the South Sumatra especially, and Indonesia in general. Keywords : Gross domestic product, Education, Unemployment, Poverty 1. Introduction The purpose of economic development is to growth in a country or region is the Gross improve the equitable welfare of society. The Domestic Product (GDP) [2]. Through the Indonesian government's efforts to realize the process of economic growth, can see the welfare of the community are to provide economic activities that have been done and autonomy to regional governments based on achieved in South Sumatra during a certain broad autonomy, real and responsible so that the period. In addition, the rate of economic growth regions have the authority to regulate their local can also be attributed to the rate of population government based on their community's growth because in principle economic growth aspirations. For these purposes, it's needed the should be enjoyed by the population. Population better planning by utilizing existing resources. needs to be considered, because in addition as a According to the views of economists, there are subject, the population is also the object of at least four factors that affecting economic development.The changes that occur in the growth, they are: population, capital, land and aspect of population will affect the development natural wealth, and also the level of education process and the objectives to be achieved. and technology that used, although the economic High population growth rates will lead to a growth may depend on many factors [1]. rapid increase in the number of workforces and South Sumatera Province is one of the cause the number of jobs to become narrow or provinces in Indonesia that get regional few. It can lead to unemployment problems that autonomy. Economic growth in South Sumatra exist in an area. High unemployment rates in a Province since 2013 - 2018 tends to increase. region can cause to increased poverty and show From terms of production, growth is dominated the less successfull of the development. The by agriculture, forestry, and fisheries that grew percentage of poverty rate in South Sumatra 10.18 percent, while in terms of expenditure is fluctuated, which in 2013 by 14.80 percent more caused by exports that grew 34.92 percent. decreased to 13.95 percent in 2014, and 13.48 Economic growth use one of the indicators percent in 2015. However, the poverty rate used to look at the symptoms of economic increased again in 2016 by 14.06 percent, 13.62 Universitas Bina Insan Lubuklinggau 254 Jurnal Media Ekonomi (JURMEK) Vol. 25, No. 3 Desember 2020 p-ISSN : 1693-4768, e-ISSN : 2656-8861 percent in 2017 and increased again in 2018 by economic growth aims to illustrate the economic 14.25 percent [3]. problems faced by a country or region in the Economic development is an attempt to long term. The problem of economic growth is improve the living standard of a nation that is divided into three aspects, they are: The first often measured by the high low real incomes per aspect is sourced from the differences between capita. The purpose of economic development in the potential growth rate that can be achieved addition to raising real incomes, as well as to with the level of economic growth that has increase productivity [4]. In carrying out its achieved. Investments made at this time can development activities, there are factors that increase inventory of capital goods in the future, determine the success or failure of the so the potential of a country or region to produce development process that done by a country. goods and services will increase. Technological According to Irawan and M. Suparmoko, these advances, population growth and productivity factors can be classified into two kinds, namely development can also increase production of economic factors and non-economic factors that goods and services. However, that rising of include the legal system, education, health, factors do not necessarily increase economic religion, government, and etc. To achieve the growth. The second aspect is increasing the success of development activities, then there potential for growth. When a country or region must be performance optimization to these will increase the growth of GDP to a certain factors. amount to reduce unemployment problems, but Economic growth is capacity increase in a in reality the growth of GDP achieved is not as long-term of a country to provide a range of planned. As a result, unemployment problems economic goods to its population [5]. The can not be resolved, causing that State or region increase in capacity was determined by the to think of ways to accelerate the pace of presence advancement or adjustments of economic growth. The third aspect is the technology, institutional (institutional) and determination of the prevailing economic growth ideological. There are six characteristics of from one year to the next year. Changes in process in economic growth that done by economic growth is faced a country or region developing countries that have become are fluctuating. At one time it can grow rapidly, developed country, including: and in certain times can run slowly or lower than 1. High per capita output growth rate and the previous year. Low economic growth can population growth. increase the poverty rate. 2. High factor productivity increase rate. Poverty is a condition where someone can 3. High level of structural economic not enjoy all kinds of choices and opportunities transformation. in the fulfillment of basic needs, such as not 4. The level of social transformation and being able to meet health, decent living ideology is high. standards, freedom, self-esteem and respect as 5. There is a tendency for countries that start others, and the future gloom of the nation and or that have already advanced of its state. Poverty is a problem faced by all economies to try to add the parts of its other countries, especially in developing countries like world as a marketing area and source of Indonesia. This is because poverty is new raw materials. multidimensional, it means that because human 6. Limited spread of economic growth which needs are various, then poverty also has many reaches only about one third of the primary aspects including the poverty of assets, population. socio-political organizations, knowledge, and Based on macroeconomic analysis, skills and also secondary aspects such as the economic growth has two different poverty of social networks, sources Finance, and understanding. On the one hand, economic information. growth is used to describe an economic that has The level of poverty can be divided into experienced economic development and reached poverty of Absolute, Relative and Cultural . a high level of prosperity [6]. On the other hand, While the cause of poverty is divided into four Universitas Bina Insan Lubuklinggau 255 Jurnal Media Ekonomi (JURMEK) Vol. 25, No. 3 Desember 2020 p-ISSN : 1693-4768, e-ISSN : 2656-8861 mahzab, namely Individual explanation, Population growth and labor force growth Familial explanation, Subcultural explanation, (which occurred several years later after the and Structural explanation. At least some of the population growth) has traditionally been problems source that must be resolved in order regarded as one of the factors increasing the to can resolve all the problems as follows: first, economic growth. the Larger amount of because of poor, someone must have a small workforce it means will add the amount of income. Because the income is lower, the productive forces, while greater population purchasing power of information and knowledge growth means increasing the size of its domestic is low. This low purchasing power of market. In other words, the more labor force is information and knowledge, will cause the poor used in the production process, the output of not to have enough knowledge. Less knowledge, production will increase to some extent. In an will cause a person's productivity to be small. internationally defined standard of Because of its small productivity, it will cause understanding, what is meant by unemployment them to be fall poor again. Second, because of is a person who has been classified into the labor poor, someone will only have a small savings. force who is actively looking for a job at a Because having small savings, will make the certain wage level, but can not get the job that he ownership of someone's capital becomes low wants [5]. Unemployment is divided into 3 types which will cause low production and low based on the circumstances that cause it, such as income. Because the income is lower, it will [6]: cause them to be fall poor again. Third, because 1. Frictional unemployment, is unemployment of poor, someone will only have low that caused by the actions of a worker to consumption ability.
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