The Influence of Poverty and Unemployment on the Human Development Index in Indonesia from 2010-2024

Abstract

This study examines the impact of poverty and unemployment on the Human Development Index (HDI) in Indonesia from 2010 to 2024, utilizing secondary data from Statistics Indonesia (BPS) and multiple linear regression analysis. The results indicate that poverty has a significant negative effect on the Human Development Index (HDI), with a 1% increase in poverty resulting in a 2.26-point decline in HDI. Conversely, unemployment exhibits a positive yet complex relationship with HDI, suggesting potential moderating factors, such as government interventions. Together, poverty and unemployment explain 93% of the variation in HDI (adjusted R² = 0.91), underscoring their critical role in human development. The findings align with Human Capital Theory and Islamic principles, which emphasize equitable wealth distribution (Zakat, Infāq, and Waqf) and the protection of basic needs (maqāṣid al-sharīʿah) to address socioeconomic disparities. The study emphasizes the importance of implementing integrated policy measures, including targeted budgeting for education, healthcare, and job creation, to mitigate poverty and unemployment and foster sustainable human development in line with both empirical evidence and Islamic teachings. These insights contribute to the broader discourse on achieving Sustainable Development Goals (SDGs) in developing economies.