Factors Affecting Poverty on the Island of Sumatera

Abstract

Poverty is a problem faced by many developing countries in general. Poverty is a reflection of the economic activities carried out by a country. The poverty level of a country shows that the development programs implemented by the government are not optimal. This study was conducted to analyze the determinants of poverty in 10 provinces on the island of Sumatra from 2006-2019. Multiple regression equation models were built for this research using the Ordinary Least Squares (OLS) method with the e-views 8 tool. The results show that simultaneously, the independent variable has a significant effect on poverty and partially one variable that does not significantly affect poverty, namely unemployment. An increase in education (literacy rate) and infrastructure (road length) leads to an increase in poverty and inequality in income distribution (the Gini Index), resulting in a decrease in poverty. It is hoped that future researchers will use education, infrastructure, and income distribution variables with different proxies.