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All Journal Trikonomika: Jurnal Ekonomi
Safara Indah
Universitas Sebelas Maret, Indonesia
Economics, Econometrics & Finance

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SMES, PURCHASING POWER PARITY, LABOR WAGES, AND ECONOMIC STRUCTURE ON POVERTY REDUCTION IN CENTRAL JAVA Sarjiyanto Sarjiyanto; Safara Indah; Ana Ahmad; Suryanto Suryanto; Sarwoto Sarwoto
TRIKONOMIKA Vol 25 No 1 (2026): June Edition
Publisher : Faculty of Economics and Business, University of Pasundan

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.23969/trikonomika.v25i1.33595

Abstract

The detrimental effects of poverty highlight the need to understand factors influencing its reduction. This study aims to examine whether SME performance, purchasing power parity (PPP), labor wages, and economic structure impact poverty levels. The study finds that PPP and labor wages significantly contribute to poverty reduction, whereas the number of SMEs, employment rates, and economic structure have not effectively alleviated poverty in Central Java. This result may be linked to the impact of the COVID-19 pandemic, which markedly increased poverty levels during the study period. We recommend that the Central Java Government take measures to strengthen SMEs by improving access to capital and providing training, diversify the economy to create job opportunities in low-income areas, boost PPP through cash transfers, raise wages by implementing minimum wage policies and subsidies, and re-evaluate the economic structure to foster inclusive growth for sustainable poverty reduction.
Co-Authors Ana Ahmad Sarjiyanto Sarwoto Sarwoto Suryanto Suryanto