Education, GDP and Their Role in Poverty in Indonesia: VECM Analysis

English

Abstract

The purpose of this investigation was to examine how progress in education and the
economy have affected poverty levels in Indonesia. For Indonesia, we utilise World Bank
information for the years 2000-2019. The levels of poverty and education are used as
independent variables. Additionally, Vector AutoRegressive (VAR) is used in the testing
process. The data indicated that higher levels of education correlate with lower rates of
joblessness. In addition, there is a link between higher levels of education and economic
development in Indonesia. The current high poverty rate in Indonesia is a consequence
of earlier low poverty rates. The quality of education is a key indicator of economic
development in Indonesia, thus policymakers should develop effective plans and
programmes to that end. The poverty rate in Indonesia will decrease thanks to this
programme.