Financial development and poverty reduction in developing countries

Abstract

The poverty becomes a serious problem because of the impact it causes. The factors that affect poverty are economic growth, low education, the limitation of natural resources, the limitation of employment opportunities, capital, and family burdens. All of these factors constitute a vicious circle in the problem of poverty. The problems studied are lag-1 investment, lag-2 investment, employment opportunities, and provincial minimum wages and their effects on the poverty rates in Riau Province, Indonesia. The fundamental problem faced by Riau Province today is the high level of poverty amidst government policies that have not met the expectations. The purpose of this study is to analyze government policies in order to reduce the poverty. The research method used was an explanatory study or hypothesis testing study that aims to explain and test hypotheses for the relationship among variables. The relationship described is a causal (cause-effect) relationship. The data were arranged in the form of time series during 1997-2018. The research model was formulated as a linear function based on the Nerlove's Partial Adjustment Model approach and was recursively analyzed using linear regression through the Ordinary Least Square (OLS) method. The findings of this research model are lag-1 investment, lag-2 investment, employment opportunities, and provincial minimum wages have a significant effect on the poverty rate in Riau Province.

Investigating the Relationship Between Local Business and Employment Creation for Poverty Reduction in Northern Ghana: The Moderating Role of Local Economic Development (LED) Policy

“…As this happens, living standards increase, reflecting positively in their poverty reduction levels. This finding supports that of Zulher and Ratnasih (2021), Zhang et al (2021), and Krishna (2020), who found that local employment creation leads to poverty reduction. Nonetheless, this finding refutes that of Ravallion (2019) and Osabohien et al (2020), who found that local employment creation does not have a positive link with poverty reduction.…”

“…Another factor that can influence poverty reduction is the creation of local employment avenues. To delve deeper, Zulher and Ratnasih (2021) revealed that employment creation by the local government affects poverty reduction in Indonesia. Zhang et al (2021) wrote that the irrigation schemes initiated through the support of the local government created jobs for community members and again increased their financial gains, thereby reducing their poverty levels to minimum levels in Tanzania.…”

The Economic Structure and Employment Opportunities (Cases in Bengkulu, Indonesia)

“…The interaction of the two sectors base on the surplus of labour generated from the agricultural sector. The existence of change or transition as a characteristic of development is also stated by Zulher C. Ratnasih [1], who defines economic development as a multidimensional process that includes changes in structure, life attitudes, and institutions, apart from increasing economic growth, reducing distribution inequality and poverty eradication. From an employment perspective, Srinivasan [2] argues that development expresses as a transfer of labour from agriculture to industry and services.…”

Financial Sector and Social Sector Models as Activator of Economic Growth in Indonesia

“…Where Human Resources is one thing that cannot be separated from the level of the business world and work and especially now that there is a lot of competition in the business world. The role of motivation, environment and work experience which will later become one important role of work encouragement for the employee himself (Zulher & Ratnasih, 2021).…”