Determinants of Poverty in Indonesia 2015-2019

Abstract

According to the average of poverty level in Indonesia from 2015-2019 is 10,17 percent, it is show that the poverty in Indonesia has been decrease 1,91 percent, but this achievement has not fulfill the target yet as written in Rencana Pembangunan Jangka Menengah Nasional (RPJMN), which is 7-8 percent. The purpose of this research is to analyze the factors that affect to poverty in Indonesia, including : average length of schooling, labor absorption, income per capita (GRDP per capita), and province minimum wages (UMP). This research use secondary data, with multiple regression analysis and Fixed Effect Model (FEM). 

The results show, as simultaneous all the independent variable has significant effect to the dependent variable. As partial show that income per capita and labor absorption have positive effect to poverty but only the labor absorption has significant effect. Beside the average length of schooling and province minimum wages have negative insignificant effect to poverty in Indonesia.

The implication to decrease the poverty is increasing the number of the labor absorption itself, through easing for making the business license, easing for taking the business credit, and increasing the skills and quality of the labour by intensification and extension the job training and also certification for the labour’s skills.

Keywords: RPJMN; PDRB per capita; province minimum wages; fixed effect model; certification for labour’s skills.