ETIKONOMI
Vol. 24 No. 2 (2025)

The Role of Economic and Social Safety Nets in Extreme Poverty in Indonesia

Setyadi, Sugeng (Unknown)
Indriyani, Lili (Unknown)
Widiastuti, Anita (Unknown)



Article Info

Publish Date
30 Sep 2025

Abstract

Research Originality: This study focused on addressing the goal of reducing extreme poverty (EP) to 0% by 2024 in Indonesia, an objective that has been underexplored in global literature. Research Objectives: This study examined convergence in EP across Indonesia and analyzed the impact of economic as well as social variables on poverty reduction. Research Methods: Panel data from 34 Indonesian provinces (2017–2022) were analyzed using Generalized Method of Moments (GMM) and K-means Cluster analysis for regional classification. Empirical Result: The results showed that provinces in Indonesia were reducing EP at an annual rate of 1.19%, with a half-life of 1.6 years. This process signified that the country was on a path to achieve near-zero EP by 2024. Major socioeconomic drivers identified during the study included employment expansion and investments in education. Moreover, K-means Cluster analysis identified Cluster 1 (Central Sulawesi, North Maluku, Papua) with the highest EP rate of 1.52%, showing critical geographic disparities. Implications: The Government should adopt a multilevel strategic framework prioritizing regions with the highest poverty rates. Job creation and better access to education played a crucial role. Additionally, Indonesia's success could serve as a model for sustainable EP eradication in developing nations. JEL Classification: I32, P46, Q01

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Journal Info

Abbrev

etikonomi

Publisher

Subject

Economics, Econometrics & Finance

Description

Etikonomi is a peer-reviewed journal on Economics, Business and Management by Faculty of Economic and Business State Islamic University (UIN) Syarif Hidayatullah Jakarta. FOCUS This journal focused on economics, business, and management studies and present developments through the publication of ...