Analisis Determinan Indeks Pembangunan Manusia di Jawa Tengah Tahun 2014-2022 Menggunakan Metode System Generalized Method of Moments

Abstract

Population density affects the Human Development Index (HDI), particularly in terms of equitable access to education, healthcare, and economic opportunities. In Central Java, regional variations in population density have the potential to create disparities in HDI achievement. This study aims to evaluate the impact of the labor force participation rate, regional minimum wage, regional gross domestic product per capita, and government spending in the education and health sectors on the Human Development Index (HDI) in Central Java Province. The data analysis method applied in this study is the System Generalized Method of Moments because it effectively addresses endogeneity and unobserved heterogeneity, and produces reliable estimates through a combination of differential equations and levels. The research findings indicate that the labor force participation rate, regional gross domestic product per capita, and government spending in the health sector have a positive and significant effect on the HDI. In contrast, the regional minimum wage and government spending in the education sector do not have a significant effect on the HDI in the province due to the lack of effectiveness budget management. To encourage HDI improvement, a comprehensive strategy is needed, including expanding access to education, improving the quality of health services, creating decent employment opportunities, adjusting the minimum wage proportionally, as well as optimizing government spending and ensuring equitable development across regions.