Causality Analysis Between Education and Poverty in Indonesia as an Effort to Achieve SDGs

Authors

  • Ni Nyoman Reni Suasih Udayana University
  • Putu Yudy Wijaya Hindu Indonesia University
  • I Gede Putu Kawiana Hindu Indonesia University
  • Ida Ayu Nyoman Saskara Udayana University

Abstract

No poverty and quality education are two of 17 Sustainable Development Goals (SDGs). Previous studies have suggested a causal relationship between education and poverty, but in each region or country the relationship might not be the same. The purpose of this study is to analyze the causality relationship between education (proxied by the mean years of schooling) and poverty (proxied by the number of poverty) in Indonesia as one of the countries with the most population in the world. The data analyzed is secondary data, precisely the panel data from 35 provinces in Indonesia with a period of 5 years (2015-2019). The analysis technique used is the Granger Causality Test. The results showed that the number of poverty significantly affected the mean years of schooling, while the number of poverty did not significantly influence the mean years of schooling. But the literacy rate has a significant effect on the number of poverty, while the number of poverty does not significantly influence the literacy rate. The results of this study can be used by governments to develop policies to realize no poverty and quality education. If the government wants to reduce the number of poverty, it can be done by increasing the literacy rate, remembering that the literacy rate is the main skill to carry out economic activities. If the number of poverty has been reduced, it will have a significant impact on increasing years of schooling, because to pursue further education certainly requires costs, while the Indonesian government is currently only implementing 9-year compulsory education.

Published

2020-05-16

Issue

Section

New decade on Social Sciences