THE IMPACT OF EDUCATION AND INVESTMENT ON POVERTY IN INDONESIA

Abstract

Poverty is a problem wich faced by various country in the world, one of them is Indonesia. Several province
in Indonesia still have a large number of poor people, Papua and West Papua Province have percentage of
poor people of 27.43% and 22.66% in 2018. In addition, the length of schooling in these province is
consecuentively amounted to 6.52 and 7.27 year. This study aims to determine the effect of the level of
education and investment on poverty in Indonesia. This study used a panel data of 12 provinces in
Indonesia, namely, Papua, West Papua, Maluku, North Maluku, West Sulawesi, Gorontalo, Southeast
Sulawesi, Central Sulawesi, South Sulawesi, North Sulawesi, West Nusa Tenggara, and East Nusa
Tenggara Province in time 2016-2018. The theory used in this research is Keynesian Theory, this theory
state that by increasing education and investment, it can be a solution to reduce poverty. The data
processed using Eviews 11. Result shows that the level of education has a negative significant effect on
poverty and investment has negative insignificant on poverty.