Kuni Kurniawati, Bhimo Rizky Samudro

The role of gender empowerment on income inequality in Indonesia: Evidence from panel data

Introduction

The role of gender empowerment on income inequality in indonesia: evidence from panel data. Examine gender empowerment's role in Indonesian income inequality (2015-2023). HDI reduces disparity; poverty & domestic investment increase it. GEI's impact is not significant.

Abstract

Income inequality in Indonesia, remains as a serious global issue. This study is driven by the existing inter-regional disparities and the limited integration of gender indicators in inequality analysis, particularly across all provinces in Indonesia. The issue of income distribution inequality is certainly influenced by various factors. This study was conducted with the aim of understanding the effect of the Gender Empowerment Index (GEI), Human Development Index (HDI), poverty, and Domestic Investment (DI) on income inequality in Indonesia. The data in this study is secondary panel data sourced from the Central Bureau of Statistics, covering 34 provinces over the 2015-2023 period. The research method is the fixed effects model. The findings indicate that GEI does not have a statistically significant impact. On the contrary, HDI has a significant negative effect, while poverty and domestic investment have a significant positive effect on income distribution inequality. These findings highlight the need for inclusive human development policies, equitable investment distribution, and targeted poverty reduction strategies. This study also contributes by providing evidence-based recommendations to reduce interprovincial disparities in Indonesia and strengthen discussions on more equitable and fair policies.

Review

This study tackles the highly relevant and persistent challenge of income inequality in Indonesia, a critical global issue with significant inter-regional disparities. The authors' initiative to integrate gender indicators into this analysis, particularly across all provinces, addresses a notable gap in existing literature. By investigating the influence of the Gender Empowerment Index (GEI), Human Development Index (HDI), poverty, and Domestic Investment (DI), the research aims to provide much-needed insights into the multifaceted drivers of income distribution. This endeavor promises to contribute meaningfully to both academic understanding and the formulation of more equitable development policies within the Indonesian context. Methodologically, the research benefits from a robust design, utilizing secondary panel data from the Central Bureau of Statistics, encompassing 34 provinces over a substantial nine-year period from 2015 to 2023. The choice of a fixed effects model is appropriate for this type of panel data, effectively controlling for unobserved time-invariant characteristics across provinces and thus enhancing the internal validity of the findings. The selection of independent variables—GEI, HDI, poverty, and DI—is well-conceived, reflecting a comprehensive approach to understanding the complex interplay of factors affecting income inequality, indicating a sound analytical framework. The findings offer a nuanced perspective, revealing that while HDI significantly contributes to reducing income inequality, and poverty and domestic investment exacerbate it, the Gender Empowerment Index surprisingly does not show a statistically significant impact. This particular result regarding GEI warrants deeper exploration and discussion within the full paper to unpack potential reasons, such as the specific measurement of GEI, potential confounding factors, or time lags, which could further enrich the study's contribution. Nevertheless, the study effectively underscores the urgent need for inclusive human development policies, equitable investment distribution, and targeted poverty reduction strategies, providing valuable evidence-based recommendations for policymakers striving to mitigate interprovincial disparities and foster a more equitable and fair society in Indonesia.

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