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Dynamics of Growth, Poverty and Human Capital: Evidence from Indonesian Sub-National Data

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  • de Silva, Indunil
  • Sumarto, Sudarno

Abstract

The aim of this study is twofold. First, despite the vast empirical literature on testing the neoclassical model of economic growth using cross-country data, very few studies exist at the sub-national level. We attempt to fill this gap by utilizing panel data over the 2002-2012 period, a modified neoclassical growth equation, and a dynamic panel estimator to investigate the effect of both health and education capital on economic growth and poverty at the district level in Indonesia. Secondly, whilst most existing cross-country studies tend to concentrate only on education as a measure of human capital, we expand the analysis and probe the effects of health capital as well. As far as we are aware, no study has done a direct and comprehensive examination of the impacts of health on growth and poverty at the sub-national level. Thus this study is a premier at the sub-national level, and our findings will be particularly relevant in understanding the role of both health and education capital in accelerating growth and poverty reduction efforts.

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  • de Silva, Indunil & Sumarto, Sudarno, 2014. "Dynamics of Growth, Poverty and Human Capital: Evidence from Indonesian Sub-National Data," MPRA Paper 65328, University Library of Munich, Germany, revised 18 Nov 2014.
    • Handle: RePEc:pra:mprapa:65328
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    More about this item

    Keywords

    Neoclassical Growth; Poverty; Human Capital; Health; Education; Dynamic Panel;
    All these keywords.

    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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