THE INFLUENCE OF EDUCATION BUDGET ON INCOME INEQUALITY BETWEEN REGIONS IN BANTEN PROVINCE
The regional development paradigm still prioritizes economic growth, whereas income distribution as a secondary issue. One of the functions of the government is to allocate the budget for public to reduce inequality, by using resources efficiently. The education budget has been set at a mandatory...
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| Format: | Theses |
| Language: | Indonesia |
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| Online Access: | https://digilib.itb.ac.id/gdl/view/72067 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | The regional development paradigm still prioritizes economic growth, whereas income
distribution as a secondary issue. One of the functions of the government is to allocate the
budget for public to reduce inequality, by using resources efficiently. The education budget has
been set at a mandatory 20% of the APBN and APBD. However, education in Indonesia still
faces problems, such as low quality of education and inequality in access to education. The
quality of public education will affect the quality of human resources, and the quality of human
resources will affect the chances of getting a job and the income earned. The objectives of
regional expansion are economic growth and reducing inequality. Banten Province is one of
the expansion provinces, which has a problem of income inequality between regions, and since
the division, inequality has tended to increase. The education budget in Banten Province has
reached 20% of the APBD, the HDI score is ranked 8th nationally, and GRDP per capita has
increased every year, but income inequality is still a complex problem to be faced. Previous
research has mostly focused on the relationship between education and income inequality, but
relatively few have studied the effect of fiscal policy on income inequality. Therefore, this study
seeks to analyze the effect of the education budget on income inequality in Banten Province,
and in the context of regional planning, whether there is a spatial influence in the linkage of
the education budget to income inequality in Banten Province.
This study uses the Williamson index and Theil entropy index to identify income inequality
between regions of Banten Province. According to the study's findings, there is income
inequality between districts/cities, and also within regions. Using panel data regression
analysis with the fixed effect (FE) method to identify the pattern of the relationship between
the education budget and inequality interregional income and using spatial error model (SEM)
to analyze spatial patterns of income inequality between regions. The findings of the regression
with the fixed effect show that the education budget has a negative and significant effect, while
TPT and the number of poor people have a positive and significant effect on inter-regional
income inequality in Banten Province. The education budget influences indirectly and has a
direct impact on other variables first. Therefore, the influence of the education budget will
have a significant impact on reducing income inequality between regions in the long term. The
level of income inequality in a district/city affects in other adjacent district/city, with a TPT as
a significant causal factor, while the education budget has no significant effect on income
inequality between adjacent districts/cities. The findings of this study are expected to be taken
when government policies regarding education budget allocations are made, as well as to
reduce income inequality. In addition, it is also expected to broaden academic insight and
understanding regarding the influence of fiscal on regional planning |
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