Article Sidebar

Download
Download Pdf (Bahasa Inggris)
Statistic
Read Counter : 30 Download : 15

Main Article Content

Abstract

Abstract


This study attempts to assess threshold levels of income inequality and human development quality on economic growth for 34 provinces in Indonesia during 2022-2023. The cross-section threshold regression was employed. The findings reveal that the threshold levels of income inequality in 2022 and 2023 were 0.319 and 0.345, respectively. At the same time, the threshold levels of human development index were 71.65 and 71.25, respectively. The condition posits that the quality of income distribution and human development will be marginally lower in 2023 than in 2022. By considering Global OLS, total labor force and unemployment rate deliver a significant and negative impact on economic growth at 10% level in 2022. Interestingly, FDI provides a positive impact at 10% (income inequality) and 1% (human development) levels. Therefore, the central and local governments are challenged to design economic development under inclusive and sustainable perspectives. Their policies can improve the quality of labor (educated, skilled labors, and productive) and increase the equality of economic activities for all provinces. Besides, those governments should lead all economic agents to obtain and guarantee the quality of human development in the long-run.


Keywords : Income Inequality, Human Development, Threshold Level, Economic Growth.


Abstrak


Studi ini berupaya menilai ambang batas ketimpangan pendapatan dan kualitas pembangunan manusia terhadap pertumbuhan ekonomi di 34 provinsi di Indonesia selama periode 2022–2023. Metode cross-section threshold regression digunakan dalam analisis ini. Temuan penelitian menunjukkan bahwa ambang batas ketimpangan pendapatan pada tahun 2022 dan 2023 masing-masing sebesar 0,319 dan 0,345. Pada saat yang sama, ambang batas indeks pembangunan manusia (IPM) masing-masing tercatat sebesar 71,65 dan 71,25. Kondisi ini menunjukkan bahwa kualitas distribusi pendapatan dan pembangunan manusia pada tahun 2023 sedikit lebih rendah dibandingkan dengan tahun 2022. Dengan mempertimbangkan Global OLS, total angkatan kerja dan tingkat pengangguran memberikan pengaruh yang signifikan dan negatif terhadap pertumbuhan ekonomi pada taraf 10% di tahun 2022. Menariknya, Penanaman Modal Asing memberikan dampak positif pada taraf 10% (untuk ketimpangan pendapatan) dan 1% (untuk pembangunan manusia). Oleh karena itu, pemerintah pusat dan daerah ditantang untuk merancang pembangunan ekonomi dengan perspektif yang inklusif dan berkelanjutan. Kebijakan mereka dapat meningkatkan kualitas tenaga kerja (terdidik, terampil, dan produktif) serta mendorong pemerataan aktivitas ekonomi di seluruh provinsi. Selain itu, pemerintah juga perlu memimpin seluruh pelaku ekonomi untuk mencapai dan menjamin kualitas pembangunan manusia dalam jangka panjang.


Kata kunci: Ketimpangan Pendapatan, Pembangunan Manusia, Tingkat Ambang, Pertumbuhan Ekonomi

Article Details

License
Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

  • This statement is a commitment from the author, to respect copyright, both in terms of quoting the work of others, as well as in the use of journal content. 
  • If needed, the author can send a statement of authenticity of the manuscript. With the receipt of an article by the Editor of Convergence: The Journal of Economic Development, the article submitted has the copyright held by Convergence: The Journal of Economic Development Convergence: 
  • The Journal of Economic Development has the right to reproduce and distribute articles that have been published in journals. 
  • The author is not permitted to publish the same article that has been published in this journal.
How to Cite
Cahyadin, M., & Tambunan, T. T. (2025). Assessing Threshold Levels Of Income Inquality And Human Development Quality On Economic Growth In Indonesia. Convergence: The Journal of Economic Development, 7(1), 20–39. https://doi.org/10.33369/convergencejep.v7i1.39975
Download Citation
Endnote/Zotero/Mendeley (RIS)
BibTeX

References

  1. Alamanda (2021). The Effect of Economic Growth on Income Inequality: Panel Data Analysis from Fifty Countries. Info Artha, 5(01), 1 – 10.
  2. Bloom, D. E., Khoury, A., Kufenko, V. & Prettner, K. (2020). Spurring economic growth through human development: research results and guidance for policymakers. PGDA Working Paper No. 183. Harvard University.
  3. Bouincha, M. & Karim, M. (2018). Income Inequality and Economic Growth: An Analysis Using a Panel Data. International Journal of Economics and Finance, 10(5). https://doi.org/10.5539/ijef.v10n5p242
  4. Chiappero-Martinetti, E., von Jacobi, N. & Signorelli, M. (2015). Human Development and Economic Growth. In: Hölscher, J., Tomann, H. (eds) Palgrave Dictionary of Emerging Markets and Transition Economics. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-137-37138-6_13
  5. de Carvalho, L. D. & Gabriel, L. F. (2023). A North-South Economic Growth Model: The Role of Income Distribution. IE, 82(325), Verano, 149-181. http://dx.doi.org/10.22201/fe.01851667p.2023.325.84287
  6. Hansen, B.E. (1999). Threshold Effects in Non-Dynamic Panels: Estimation, Testing, and Inference. Journal of Econometrics, 93(2), 345-368.
  7. Hansen, B.E. (2000). Sample Splitting and Threshold Estimation. Econometrica, 68(3), 575-603.
  8. Kuznets, S. (1955). Economic Growth and Income Inequality. The American, XLV (Number One), 1-28.
  9. Mdingi, K. & Ho, S.-Y. (2023). Income inequality and economic growth: An empirical investigation in South Africa. MPRA Paper No. 117733, 1-30.
  10. Nainggolan, L. E., Lie, D., Siregar, R. T., Nainggolan, N. T. (2022). Relationship between Human Development Index and Economic Growth in Indonesia Using Simultaneous Model. Journal of Positive School Psychology, 6(6), 695 – 706.
  11. Nayyar, D. (2023). Economic Policies for Human Development: A Neglected Domain. Journal of Human Development and Capabilities, 24(4), 430-438. https://doi.org/10.1080/19452829.2023.2252646
  12. Omar, D. A. (2020). Inter-Relationship between Economic Development and Human Development Analytical Study of selected Arab Countries. Utopía y Praxis Latinoamericana, 25(1), 85-94. https://doi.org/10.5281/zenodo.3766122
  13. Romer, D. (2019). Advanced Macroeconomics (5th ed.). New York: McGraw-Hill Education.
  14. Scitovsky, T. (1964). A Survey of Some Theories of Income Distribution. In The Behavior of Income Shares: Selected Theoretical and Empirical Issues, p. 15 – 51. USA: Princeton University Press
  15. Setyowati, I. Y., Malik, N., & Suliswanto, M. S. W. (2024). Enhancing Human Development Quality in Indonesia: Socio-Economic and Technological Capabilities, 23(1), 93 – 108. https://doi.org/10.15408/etk.v23i1.35508
  16. Soeparno, W. S. I. & Pratomo, W. A. (2023). Does the Democracy and Economic Growth Affect Human Development in Indonesia? Journal of Sustainable Economics, 1(1), 58-64.
  17. Suri, T., Boozer, M. A., Ranis, G. & Stewart, F. (2011). Paths to Success: The Relationship between Human Development and Economic Growth. World Development, 39(4), 506–522. https://doi.org/10.1016/j.worlddev.2010.08.020
  18. Taqi, M., Ali, M. S. e, Parveen, S., Babar, M. & Khan, I. M. (2021). An analysis of Human Development Index and Economic Growth. A Case Study of Pakistan. iRASD Journal of Economics, 3(3), 261 – 271. https://doi.org/10.52131/joe.2021.0303.0042
  19. Tinbergen, J. (1956). On the Theory of Income Distribution. Weltwirtschaftliches Archiv, Bd. 77, 155-175. http://www.jstor.org/stable/4043539
  20. Topuz, S. G. (2022). The Relationship between Income Inequality and Economic Growth: Are Transmission Channels Effective? Social Indicators Research, 162, 1177–1231. https://doi.org/10.1007/s11205-022-02882-0