Analysis of Factors Affecting Poverty in the North Sumatra Province

Abstract

North Sumatra is the province with the largest number of poor people in 2019 with the fifth highest
poverty percentage on the island of Sumatra. This province has a good potential for accelerating
economic growth and improving the quality of life if all levels of society are empowered with all their
capabilities in carrying out productive business activities, and can access to socio-economic
resources. This study aimed to determine and analyze the effect of the real GDP per capita variable,
the open unemployment rate, and the average length of schooling simultaneously and partially on
the poverty rate in 33 cities and regencies of North Sumatra Province in 2017-2019. It used secondary
data using the Eviews program, while analysis technique used was panel data regression. Based on
the research results, it was found that the real GDP per capita, the open unemployment rate, and the
average length of schooling simultaneously had a significant effect on the poverty level. Per capita
real GRDP and average length of schooling partially had a negative and significant effect on poverty
rate. Meanwhile, the open unemployment rate had no significant effect on poverty. The variable that
has the most dominant influence on the level of poverty was real GDP per capita.