Education, Health, Fiscal Decentralization & Poverty: Evidence in One of The Areas in Indonesia

DINI YULIANI, DENDY SYAIFUL AKBAR, YAT ROSPIA BRATA, ELIN HERLINA, ARI BUDIAWAN

Abstract


This study analyzes the impact of education and health on poverty by including the role of fiscal decentralization. Education and health have a negative impact on poverty for the region by implementing effective fiscal decentralization from the government. The new contribution of this study concerns the relationship between literature on education, health and separate fiscal decentralization on poverty. To our knowledge, this is the first study to analyze the direct relationship between education, health, fiscal decentralization regarding poverty. In our study, fiscal decentralization was measured using two approaches, namely local government income and expenditure. We use time-series data from 2012 to 2017 in one of the regions in Indonesia, namely Ciamis. For hypothesis testing we use Moderated Regression Analysis (MRA) for estimation of results. The study results show that education has a significant effect on poverty, while health does not have a significant effect on poverty. Other results show that fiscal decentralization represented by government revenues and expenditures can strengthen the effects of education on poverty, while the healthy relationship with poverty does not strengthen. The results of our analysis found a significant positive relationship between expenditure and poverty, this condition indicated that the Ciamis regional government did not focus on poverty alleviation programs in using its budget. The results of this study provide a reference for various local governments to carry out fiscal decentralization effectively through income and expenditure with a focus on increasing access to education for the community so as not to be ensnared by the problem of poverty.

Keywords: education, health, fiscal decentralization, poverty.


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