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All Journal EKOMBIS REVIEW: Jurnal Ilmiah Ekonomi dan Bisnis
Irfandi Liestiawan
Universitas Pembangunan Nasional Veteran Jawa Timur
Decision Sciences, Operations Research & Management Economics, Econometrics & Finance Energy Other

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Determinants Of Interprovincial Income Disparity In Java: An Analysis Of Fiscal, Macroeconomic, And Demographic Variables Irfandi Liestiawan; Marseto Marseto
EKOMBIS REVIEW: Jurnal Ilmiah Ekonomi dan Bisnis Vol 14 No 4 (2026): October
Publisher : UNIVED Press

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.37676/ekombis.v14i4.11042

Abstract

This study aims to empirically analyze the fiscal, macroeconomic, and demographic determinants of interprovincial income disparities in Java from 2015 to 2024, specifically focusing on the General Allocation Fund, economic growth, the Provincial Minimum Wage, and total population. Utilizing a quantitative approach, the research applies panel data regression with a Random Effect Model framework to analyze 60 observations across six provinces. The findings reveal that the General Allocation Fund exerts a statistically significant negative influence, effectively reducing interprovincial income inequality. In contrast, economic growth demonstrates a significant positive correlation, indicating that current economic expansion actually widens regional income gaps. Furthermore, both the Provincial Minimum Wage and total population do not show a statistically significant impact on aggregate disparity. The research concludes that decentralized fiscal support provides a crucial buffer against inequality, while the inherently exclusionary nature of Java's modern economic expansion remains a structural catalyst for disparity. Consequently, policymakers must focus heavily on structural economic reforms and inclusive growth strategies that integrate marginalized workforces, moving beyond reliance on basic demographic indicators and formal wage regulations
Co-Authors Marseto, Marseto