EMPIRICAL ANALYSIS OF POVERTY IN YOGYAKARTA: A DISTRICT LEVEL PANEL DATA INVESTIGATION

Abstract

Abstract

Poverty is one of the most intricate challenges faced by economies worldwide, including at regional levels. Addressing this issue requires a comprehensive and holistic approach. This study aimed to examine the effects of the Human Development Index (HDI), education, minimum wage, unemployment, and the Covid- 19 pandemic on poverty levels in the Special Region of Yogyakarta. The analysis utilized a fixed-effects model through panel data regression, drawing on data from Yogyakarta’s districts spanning the years 2013 to 2023. The results demonstrate that HDI, education, minimum wage, and unemployment collectively have significant effects on reducing poverty in the region. Specifically, improvements in HDI, higher levels of education, appropriate minimum wage policies, and reduced unemployment are associated with lower poverty rates. In contrast, the analysis shows that the impact of Covid-19 on poverty levels is statistically insignificant, indicating that the pandemic did not directly alter poverty rates in the region, despite its broader social and economic effects. These findings highlight the critical importance of focusing on human development, education, and labor market policies in efforts to combat poverty. To achieve sustained poverty reduction, continuous efforts must be made to improve these key variables. Policy interventions in Yogyakarta should prioritize strategies that foster education, increase minimum wages where appropriate, and further reduce unemployment to support long-term economic welfare for the population.

Keywords: Poverty, Human Development Index (HDI), Education