The Influence of the Human Development Index (IPM), Unemployment, Gross Domestic Regional Product (PDRB) and Sharia Financing on Poverty Levels in Central Java

Abstract

Poverty is a serious challenge in various countries, including Indonesia, with its impact not only being felt directly on individuals, but also having profound consequences for economic progress and societal development. The focus of this research is the problem of poverty in the province of Central Java, Indonesia. Poverty is defined as the inability to fulfill basic needs such as clothing, shelter and food, as well as the inability to obtain health facilities, access to work, and low levels of education and income (Leonita & Sari, 2019). This research aims to analyze the impact of the Human Development Index (HDI), unemployment rate, Gross Domestic Regional Product (GRDP), and sharia financing on poverty levels in Central Java. The data used comes from various official sources such as the Central Statistics Agency (BPS) and reports from sharia financial institutions. The panel data regression analysis method is used to evaluate the impact of these variables in the 2012-2022 time period. The research results show that increasing HDI contributes significantly to reducing poverty levels, while the unemployment rate does not have a significant impact. GRDP shows an insignificant negative effect, indicating that economic development is not fully related to poverty reduction. Although sharia financing does not have a significant impact, research recommends focusing on increasing HDI, evaluating employment policies, improving economic structure, and optimizing the role of sharia financing to achieve more effective poverty alleviation in Central Java. Further research can deepen other aspects that play a role in poverty levels in the region.