Analysis of Poverty and Inequality in Java, Bali, and Lampung

Article Information ________________ Hisrtory of Article Received October 2019 Accepted December 2019 Pusblished February 2020 ________________


INTRODUCTION
Poverty is a major problem in development. Poverty is a complex and multidimensional problem. In Indonesia, the Seven Provinces contributed 15.71 million of the poor to Indonesia's 27.77 million or 56.57% in 2017.
Therefore, poverty alleviation efforts must be made as one of the priority programs, especially for the government area. There is a tendency for provincial poverty in Java, Bali and Lampung Provinces to decline. There was a decrease in the Percentage of poverty from 57.76% in 2013 to 56.57% in 2017. Inequality of community income is caused by inequality in community productivity. Community productivity in the agricultural sector is different from productivity in the manufacturing industry sector, or the financial sector and the telecommunications sector. In 2017 the manufacturing sector contributed 35.54% and the agricultural sector contributed 12.03. Imai et al. (2017), Based on a crosscountry panel dataset, we find that (i) increasing population in agriculture is related to poverty alleviation after long-term poverty changes or dynamics are taken into account; (ii) the nonagricultural agriculture sector also reduced poverty in some cases; and (iii) increasing population in mega cities has no role in poverty alleviation. Another factor that also affects income inequality is the education ratio. There are several determinants of poverty levels in Java, Bali, Lampung, namely Farmer Exchange Rates, Growth of the manufacturing industry sector, growth of the agricultural sector, Average Length of Education, Percentage of people working in the informal sector. Poverty can have an impact on income inequality in society. Income inequality is caused by differences in labor productivity in the industrial sector and the agricultural sector. The ratio of productivity of the manufacturing sector to the productivity of the agricultural sector is likely to September, 2016March, 2017 be the cause of income inequality. Poverty in Java, Bali, Lampung shows a declining trend, how and what factors are causing poverty rates to decline. Likewise, the Gini index shows a decrease, how and what factors as a determinant of the decrease in the inequality index in Java, Bali Province and Lampung Province.

RESEARCH METHODS
The data used in this study are secondary data. Secondary data includes research data that has been published by the Central Statistics Agency as well as literature relating to research topics. Secondary data used are time series data for the period 2008-2017 and cross-section data covering provinces in Java including West Java, Banten, Central Java, Daerah Istimewa Yogyakarta and East Java. This research method is quantitative analysis with regression models, tobit analysis and quantitative correlation analysis to determine the determinants of poverty levels and income inequality.
Farmer exchange rate is a comparison between the price index received by farmers and the price index paid by farmers in percentage. In theory, Nilai Tukar Petani (NTP) has no direct effect on poverty, NTP will directly affect the income and benefits received by farmers. If the first time through falls, the profits received by farmers will be less or even suffer losses. High and low income of farmers will have an impact on the welfare seen in poverty levels.
Growth of the Manufacturing Industry Sector, besides the Gross Regional Domestic Product (GRDP) is an indicator of regional development, it also functions as a benchmark in seeing the level of welfare of a region. When the role of the industrial sector has increased, there has been a shift from the agricultural sector to the modern industrial sector including the manufacturing and service industries. In this economic transition, labor productivity in the modern sector is higher than the productivity of the agricultural sector so that income per capita in the modern sector will be higher. The higher income per capita will have an impact on the welfare seen in poverty levels.
Agriculture Sector Growth ,the process of transforming the structure of the economy towards industrialization and increasing the role of modern sectors (industry and services) in Indonesia's development history, where the agricultural sector which was previously the primary sector received less attention and does not guarantee the linkage of the development of the modern sector with the agricultural sector.
Average Education Duration, the average length of school indicates the higher level of formal education achieved by the community in an area. The higher the average length of school the higher the level of education that has been undertaken. The average length of school indicates the higher formal education achieved by the community in an area. The higher the average length of school verarti, the higher the level of education that has been undertaken. The higher the level of one's education, the faster the increase in expected results. Increasing income can reduce the poverty level of an area.
Through adequate education, poor people will get better opportunities to get out of poverty status in the future. Percentage of Communities Working in the Informal Sector, job status is a type of position of a person in doing work in a business unit/activity. The economic progress of a region is shown by the transformation towards decreasing unskilled laborers represented by informal sector workers. Through the transformation of workers from the informal sector to the formal sector, it is hoped that in addition to increasing the productivity of workers, it can also improve the welfare of the population in an area.
GRDP is one of the important indicators to determine the economic conditions in an area in a given period, both at current prices and at constant prices. GRDP can be used as one indicator to see the success of economic development in a region. GRDP can describe the ability of an area to manage its natural resources. If economic growth in each region experiences good development, it can reduce inequality.
Ratio of productivity of the Industrial Sector to the Agricultural Sector, the ratio of productivity of the industrial sector to the agricultural sector means the ratio of productivity between the industrial sector to the agricultural sector for a year. The size of the productivity ratio in the industrial and agricultural sectors will affect income inequality, the greater the ratio of productivity between the industrial and agricultural sectors will have an impact on the increasingly unequal income distribution. Conversely, a smaller productivity ratio will have an impact on a more even distribution of income.
Basic Education Level Ratio, the ratio of basic education level is the ratio between the pure enrollment rate of elementary schools, junior high schools with high schools and colleges. Income inequality itself occurs because of over-education. The smaller the ratio of education, then illustrates that the pure participation rate, the higher the level of education completed. The high ratio of basic education levels is a picture that there are still many people who only complete education in the category of compulsory education and have not been able to continue to a higher level of education.

RESULTS AND DISCUSSION
Poverty and Inequality Conditions of Lampung Province, in March 2018, the number of poor people (population with per capita expenditure per month below the poverty line) in Lampung reached 1,097.05 thousand people (13.14), an increase of 13.31 thousand compared to the condition of September 2017 which amounted to 1083, 74 thousand people (13.04%) (Central Statistic Agency 2018).
The level of inequality in Lampung population expenditure measured by the Gini ratio was recorded at 0.346. This  (7.83 %) in September 2017 to amounted to 3,615.79 thousand people (7.45 %)    0.000000 *)significant by 10%; **)significant by 5%; ***)significant by 1% The GRDP variable of the Manufacturing Industry Sector is significantly negative towards the poverty level with a coefficient of -0.477294, meaning that when the GRDP of the Manufacturing Industry Sector increases by 1%, the poor population will decrease by -0.477%. In line with the research of Suryahadi et al. (2009) in Indonesia that an increase in the GRDP of the manufacturing sector in the city by 1% will reduce the level of poverty both in villages and in cities by -0.02% (α = 1%). The Agricultural Sector GRDP variable is significantl negative towards the poverty level with a coefficient of -0.401375, meaning that when the agricultural sector GRDP goes up by 1%, the poor population will decrease by -0.4014%. This result is in line with the research of Benfica et al. (2018) in Mozambique which assumes the level of exogenous productivity growth so that according to historical trends, it is produced that agricultural GDP increases 4.4% per year and Total GDP grows 6.9% per year, this increase in GDP per capita reduces poverty from 51.3% in 2007 to 41.6% in 2017. The Agricultural Sector GRDP variable is significantly negative towards the poverty level with a coefficient of -0.401375, meaning that when the agriculture sector's GRDP rises by 1%, the poor population will decrease by -0.4014%. This result is in line with the research of Benfica et al. (2018) in Mozambique which assumes the level of exogenous productivity growth so that according to historical trends, it is produced that agricultural GDP increases 4.4% per year and Total GDP grows 6.9% per year, this increase in GDP per capita reduces poverty from 51.3 % in 2007 to 41.6% in 2017. The average length of Education variable is significantly positive on poverty levels with a coefficient of 0.208426, meaning that the average length of Education rises by 1 year, the poor population will increase by 0.2084%. This contrasts with Cameron's (2000) study of poverty and inequality in Java, that improving education will reduce poverty, as indicated by an increase in per capita income. 0.000000 *)significant by 10%; **)significant by 5%; ***)significant by 1% The GRDP variable is significantly positive for inequality with a coefficient of 0.067049, indicating that when the GRDP increases by 1% it will increase the inequality (gini index) by 0.067. Variable The ratio of productivity of the industrial sector/agricultural sector is significantly negative to inequality with a coefficient of -0.011532, meaning that when the productivity of the industrial sector to the agricultural sector increases by 1 unit the inequality (gini index) will decrease by -0.011532.
The decrease in inequality due to changes in economic structure (seen from changes in the number of workers per sector) is supported by an increase in productivity (GRDP/number of workers) both from the agricultural sector and the manufacturing sector in the 2007-2017 period. Agricultural productivity including: Lampung ( (2000) in Java there were differences in the Lorentz curve which showed an increase in Education causing higher inequality (Gini index increased from 0.399 to 0.4095).

CONCLUSION
Based on the analysis that has been done, the following conclusions can be drawn : In the poverty equation, when the GRDP rate of the agricultural sector and the manufacturing sector is getting bigger, it will reduce poverty levels in Java, Lampung and Bali. The influence of the industrial sector is greater than the agricultural sector in reducing poverty, which is -0.47%: -0.40%. Whereas the higher the average of education, it will increase poverty. This result is supported by the increase in educated unemployment in Indonesia, especially high school/vocational and Bachelor graduates. And unemployment is identical to poverty.
Farmer Exchange Rate (NTP) and the ratio of informal education are not significant to poverty, but the coefficient of the variable is in accordance with the hypothesis, that NTP has a negative relationship with education, while informal education has a positive relationship with poverty.
In the inequality equation, the greater the GRDP rate the greater the resulting inequality. This shows the quality of economic growth that is not good because it is lacking in equity.The ratio between the productivity of the manufacturing sector compared with the productivity of the agricultural sector is significant in reducing existing inequality. This shows that the changing economic structure from the agricultural sector to the industrial sector will reduce inequality (gini index) in Java, Lampung and Bali while the ratio of basic education level is not significant to inequality.
Increasing and equitable distribution of labor-intensive manufacturing industry sectors, because of their greater influence in reducing poverty and reducing inequality. By preparing competent human resources needed in the industrial world.
Although changes in economic structure have already begun (a decrease in the number of agricultural workers, and an increase in the number of industrial workers) and show a declining inequality (gini index), the increase in productivity of the agricultural sector needs to be intensified, because it is still inferior to the productivity of the manufacturing sector. This is to improve the welfare of farmers because the number of agricultural workers is still far more than the industrial sector.