The Influence of Labor Force Participation, Education, and Economic Growth on Poverty in Indonesia: A Provincial-Level Analysis

Abstract

This study aimed to analyze the influence of labor force participation rate, education level (measured by School Participation Rate/APS), and economic growth (measured by Adjusted Per Capita Expenditure) on the poverty rate across 38 provinces in Indonesia. Using secondary data from the Central Statistics Agency (BPS) for 2024, a multiple linear regression analysis was conducted. The results indicated that the regression model was significant (F = 18.251, p = 0.000) and explained 61.7% of the variance in poverty rates (R² = 0.617). Partially, economic growth had a significant negative effect (β = -0.521, p = 0.000), while labor force participation showed a significant positive effect (β = 0.241, p = 0.046). The education variable showed a negative but not statistically significant effect (β = -0.215, p = 0.098). The findings suggest that economic prosperity is the most crucial factor in reducing poverty at the provincial level, while high labor force participation alone, without being accompanied by quality jobs and adequate wages, does not guarantee poverty reduction. This research provides important insights for policymakers to design holistic poverty reduction strategies that focus not only on job creation but also on improving the quality of employment and equitable economic distribution.