The Impact of Economic Policy on Human Resource Quality: An Indonesia Case

Abstract

This study investigates the differential impacts of public policies, such as education budgets, health budgets, and general allocation funds, alongside economic, population, and employment sectors across overall provinces, expansion areas, and non-expansion areas in Indonesia. Guided by a Positivist research philosophy, the study utilized panel data encompassing the economic sector (gross fixed capital formation), education sector (education budget), health sector (health budget), fiscal sector (general allocation fund), population sector (population), and labor sector (labor force participation rate) from 34 provinces. Data collection involved documentation techniques to gather secondary data on HDI, IMM, gross fixed capital formation, education budget, health budget, general allocation fund, population, and labor force participation rate. The findings reveal that the economic sector positively impacts HDI but negatively affects IMM across the provinces. The education sector shows a positive effect on both HDI and IMM. Similarly, the health sector positively influences HDI but has a negative impact on IMM. The fiscal sector positively affects both HDI and IMM. The population sector positively influences HDI but does not affect IMM. Conversely, the employment sector does not impact either HDI or IMM in the 34 provinces. These results highlight the varied effects of public policy in different sectors on HDI and IMM, suggesting the need for more targeted and specific policies to enhance development across different regions in Indonesia.