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Why are Unemployment and Poverty Still Happening in Borneo Island, Indonesia?

Author

Listed:
  • Dian Wahyuningsih

    (Management Science Doctoral Program, Postgraduate, Pasundan University, Bandung, Indonesia,)

  • Ani Yunaningsih

    (Department of Management, Langlangbuana University, Bandung, Indonesia,)

  • Muhammad Sidik Priadana

    (Management Science Doctoral Study Program, Pansundan University, Bandung, Indonesia,)

  • Dio Caisar Darma

    (Department of Management, Samarinda High College of Economics, Samarinda, East Borneo, Indonesia,)

  • Purwadi Purwadi

    (Department of Management, Faculty of Economics and Business, Mulawarman University, Samarinda, East Borneo, Indonesia.)

Abstract

Efforts to alleviate unemployment and poverty must be done comprehensively, cover various aspects of community life, and be implemented in an integrated manner. The research aims to explain the relationship between variables directly, indirectly, and as a whole, to find out how much influence the minimum wages, education, and inflation rates on unemployment and poverty. The analytical approach through panel analysis based on the panel-common effect in 2015-2019 in 5 regions (West, Central, South, East, and North Borneo Island). Empirical findings state that minimum wages have a negative and significant effect on unemployment, while education has a positive and significant effect on unemployment, and inflation rates have a positive and not significant effect on unemployment. Unemployment has a positive and insignificant effect on poverty. Minimum wages have a negative and insignificant effect on poverty through unemployment, while education and inflation rates are both positive and not significant effects on poverty through unemployment. An increase in the informal sector is needed to reduce unemployment and poverty because the informal sector is the main solution to address this problem.

Suggested Citation

  • Dian Wahyuningsih & Ani Yunaningsih & Muhammad Sidik Priadana & Dio Caisar Darma & Purwadi Purwadi, 2020. "Why are Unemployment and Poverty Still Happening in Borneo Island, Indonesia?," International Journal of Economics and Financial Issues, Econjournals, vol. 10(2), pages 235-241.
    • Handle: RePEc:eco:journ1:2020-02-26
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    References listed on IDEAS

    as
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    4. Park, Albert & Wang, Sangui & Wu, Guobao, 2002. "Regional poverty targeting in China," Journal of Public Economics, Elsevier, vol. 86(1), pages 123-153, October.
    5. Evelyn Nwamaka Osaretin Ogbeide & David Onyinyechi Agu, 2015. "Poverty and Income Inequality in Nigeria: Any Causality?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(3), pages 439-452.
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    Cited by:

    1. Yohanes Kuleh & Zainal Ilmi & M. Amin Kadafi, 2022. "The Intensity of Agriculture in the Covid-19 from Indonesia – A Systematic Literature Review," Journal of Agriculture and Crops, Academic Research Publishing Group, vol. 8(2), pages 94-104, 04-2022.
    2. Dio Caisar DARMA & Jati KASUMA & Muhammad IKBAL, 2020. "Employment Absorption: Elasticity in the Industry and Services Sector in Indonesia," Management and Economics Review, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 5(1), pages 125-135, June.

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    More about this item

    Keywords

    Minimum Wages; Education; Inflation Rates; Unemployment; Poverty;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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