Effect of economic growth on income inequality, labor absorption, and welfare

Erni Panca Kurniasih


This research aims to analyze the effect of economic growth on income inequality, labor absorption and economic welfare in Indonesian provinces. A 165 observations of panel data was analyzed using path analysis. The result showed that the economic growth has significant negative effect on income inequality in Indonesian provinces but it has no significant effect on both labor absorption and economic welfare. The labor absorption has significant positive effect on income inequality even though it has no significant effect on economic welfare. In addition, the economic welfare is not significantly influenced by the income inequality.


economic growth, income inequality, labor absorption, economic welfare

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Economic Journal of Emerging Markets (EJEM)
ISSN 2086-3128 (print), ISSN 2502-180X (online)
Published by:
Center for Economic Studies, Department of Economics,
Universitas Islam Indonesia, Indonesia.

Creative Commons License
EJEM by http://journal.uii.ac.id/JEP/ is licensed under a Creative Commons Attribution 4.0 International License.