THE IMPACT OF EDUCATION, INCOME INEQUALITY, AND POPULATION GROWTH ON POVERTY IN EASTERN INDONESIA

Abstract

Poverty is still a major challenge for development in Indonesia, especially in the eastern part of the country where poverty rates are higher than the national average. This study looks at how education levels, income inequality, and population growth affect poverty across 13 provinces in Eastern Indonesia. Using a quantitative method, this research analyzes panel data from 2019 to 2025 collected by the Central Bureau of Statistics (Badan Pusat Statistik Indonesia). The data was tested using a panel data regression method called the Random Effect Model (REM), chosen after specific statistical tests including Chow, Hausman, and Lagrange Multiplier. The results show that higher education, measured by the average years of schooling, significantly reduces poverty (p = 0.0003). On the other hand, income inequality, measured by the Gini Ratio, significantly increases poverty (p = 0.0019). Meanwhile, population growth increases poverty slightly, but this effect is not statistically significant (p = 0.0575). Together, these three factors explain 32.09% of the poverty rates, meaning other factors outside this study cause the remaining 67.91%. In conclusion, improving education is key to reducing poverty, while a widening income gap makes life harder for the poor.