Effect Of Investment, Unemployment And Human Development Index Against Income Inequality (Comparative Study Of Java Island, Sumatra And Sulawesi Island)

Abstract

This study aims to analyze the effect of Investment, Unemployment and Human Development Index on Income Inequality (Comparative Study of Sumatra, Java and Sulawesi Islands). The data used is panel data (time series & cross section) from 2010 to 2023 consisting of every province on the island of Sumatra, Java and Sulawesi. Data is sourced from the Central Bureau of Statistics (BPS) and the Investment Coordinating Board, Ministry of Investment of the Republic of Indonesia. The data was analyzed by path analysis method (Sobel Test) using Eviews12 software. The results of the analysis show that partially Investment and Human Development Index have a significant direct influence on Income Inequality through GRDP in Sulawesi Island, while Unemployment indirectly has no significant effect. In contrast to Sumatra and Java, both show that Investment, Unemployment and Human Development Index do not have a significant indirect effect on Income Inequality through GRDP. However, simultaneously all these independent variables have a significant direct influence on income inequality in Sumatra, Java and Sulawesi island.