The effect of Employment Development Index on economic growth and poverty level in Indonesia

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This study aims to examine the effect of Employment Development Index (EDI) on economic growth, and the effect of EDI on poverty level and the effect of economic growth on poverty level in Indonesia. This study used descriptive and exploratory analysis with secondary data source, that is, EDI, economic growth, and poverty level in 33 provinces of Indonesia during the period 2012–2013. Linear regression analysis was used to determine the form of force conditions between these three variables. The findings revealed that the effect of EDI on economic growth is insignificant, it was caused by the GDP unable to drive the economic growth and the EDI affects significantly on the poverty level in Indonesia. Then, the effect of economic growth on poverty level is insignificant, which means the economic growth is unable to be the basis for alleviating poverty in Indonesia.

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    • Figure 1. Nurkse’s Vicious Circle
    • Figure 2. Conceptual framework
    • Figure 3. EDI and poverty in province in Indonesia during 2011–2013
    • Table 1. Operational variable compensation
    • Table 2. The Result of t-test Partial between EDI toward Economic Growth and Poverty in Border Region