ANALYSIS OF SOCIOECONOMIC FACTORS ON ECONOMIC GROWTH IN CENTRAL JAVA: PANEL DATA 2021-2023

Abstract

Economic growth is one of the key indicators used to measure the development of a country's economy. Various factors can act as drivers or barriers to economic growth, such as the challenges faced in Central Java Province, including a large labor force, lengthy schooling periods, and suboptimal capital expenditure, which have prevented a reduction in poverty levels and, in turn, hindered economic growth. This study is titled “The Influence of Socioeconomic Factors on Economic Growth in Central Java Province: Panel Data 2021-2023.” The objective of this study is to analyze the influence of socioeconomic factors on economic growth in Central Java Province during the period 2021-2023. Using panel data from 35 districts/cities, this study examines average years of schooling, labor force, and poverty levels as social factors, and regional capital expenditure as an economic factor. A descriptive quantitative approach with multiple linear regression was used in this study, and the data was analyzed using EViews 12. The results of the study indicate that average years of schooling have a positive and significant effect on economic growth. However, labor force and poverty rate have a negative and significant effect, while regional capital expenditure has a negative and insignificant effect on economic growth in Central Java Province during the period in question. The implications of this study are the importance of sustainable investment in education to improve human resource quality through compulsory education programs, teacher and curriculum improvements, and scholarships, which are key to development. Local governments need to evaluate strategies related to job creation, poverty alleviation, and the effectiveness of local capital expenditure for better labor absorption and positive economic impacts. Additionally, it is important to maintain collaboration between the government and the active role of the community in supporting and implementing education and employment initiatives to achieve inclusive and sustainable economic growth.