The Effect of Social Assistance Expenditure Realization, the Open Unemployment Rate, and the Provincial Minimum Wage on the Poverty Rate in Java Island
DOI:
https://doi.org/10.65310/djmfac28Keywords:
Minimum Wage, Open Unemployment, Panel Data, Poverty, Social Assistance.Abstract
Poverty remains a persistent development challenge on Java Island despite the implementation of various government policies and social protection programs. This study aims to analyze the effects of social assistance expenditure realization, the open unemployment rate, and the provincial minimum wage on the poverty rate in Java Island during 2020–2024, both partially and simultaneously. The study employs a quantitative associative approach using secondary data from Statistics Indonesia (BPS) covering six provinces, resulting in 30 balanced panel-data observations. The data were analyzed using panel data regression with Stata 14.2, with the Chow and Hausman tests identifying the Fixed Effect Model (FEM) as the most appropriate estimation model. The findings show that social assistance expenditure realization has a positive and significant effect on the poverty rate, while the open unemployment rate has no significant effect. In contrast, the provincial minimum wage has a negative and significant effect on the poverty rate. Simultaneously, the three independent variables significantly affect poverty, with an R² of 80.23%, indicating that they explain most of the variation in poverty across the observed provinces and period. The findings provide empirical considerations for developing more targeted, integrated, and evidence-based poverty alleviation policies in Java Island.
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