The Linkage Between Economic Growth, Income Inequality, and Poverty in Indonesia
Journal title ECONOMIA PUBBLICA
Author/s Jurnia Minati, Zulfanetti Zulfanetti, Erni Achmad, Yossinomita Yossinomita, Mukhzarudfa Mukhzarudfa
Online First 7/30/2026 Issue 2026/Online First
Language English Pages 36 P. 1-36 File size 206 KB
DOI 10.3280/ep202619148
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The relationship between economic growth and income inequality often resembles an inverted U-shaped curve, indicating that income disparities worsen initially during economic development but improve once a nation attains middle-income status. Ongoing research has explored the interplay between economic growth, inequality, and poverty from various perspectives. This study investigates the connections among economic growth, income disparity, and poverty in Indonesia. Em-ploying a simultaneous equation model with the Two Stage Least Square (2SLS) method, the research utilizes panel data spanning from 2015 to 2021, encompass-ing 34 Indonesian provinces. The models consider economic growth, income ine-quality, and poverty as endogenous variables, while exogenous variables include government expenditure, unemployment rate, educational attainment, and population size. Findings reveal interconnectedness among these variables over the 2015-2021 period.
Keywords: relationships, economic growth, income disparity, poverty, simultane-ous equation model
Jel codes: O47, D63, I32, C33, O53
Jurnia Minati, Zulfanetti Zulfanetti, Erni Achmad, Yossinomita Yossinomita, Mukhzarudfa Mukhzarudfa, The Linkage Between Economic Growth, Income Inequality, and Poverty in Indonesia in "ECONOMIA PUBBLICA " Online First/2026, pp 1-36, DOI: 10.3280/ep202619148