Determination of Poverty, Unemployment, Economic Growth, and Investment in West Sumatra Province

Abstract

This research aims to analyze the relationship between poverty, unemployment, investment, and economic growth in a simultaneous equation system with the factors that influence them. This condition is essential to identify the causes of poverty and unemployment and how investment and economic growth play a role in overcoming these problems. This research uses panel data from 19 districts/cities in West Sumatra from 2015 to 2020. The estimation technique used is a simultaneous equation using several classical assumption tests such as normality, heteroscedasticity multicollinearity, and Granger causality test. The results of this research show that 1) Unemployment, economic growth, education, and health have a significant effect on poverty in West Sumatra, 2) Economic growth, investment, and wages have a significant effect on unemployment in West Sumatra, 3) Unemployment, investment, poverty, and labor have a significant effect on the economic growth in West Sumatra, 4) Economic growth, wages, and taxes have a significant effect on investment in West Sumatra.