INCOME INEQUALITY AND REGIONAL ECONOMIC INTEGRATION: A DECADE-LONG STUDY OF THE BARLINGMASCAKEB ECONOMIC ZONE (2012–2024)

Abstract

The Barlingmascakeb region, comprising five regencies and cities in Central Java, has significant potential for economic growth. However, this growth is not always accompanied by equitable income distribution. Ongoing income inequality can hinder sustainable development and exacerbate social inequality. This study aims to analyze the level of income inequality in the Barlingmascakeb region from 2012 to 2024 and identify the factors influencing it. The methodology employs a quantitative approach, utilizing the Williamson index to measure inter-regional inequality and panel data regression analysis to assess the effects of economic growth, the unemployment rate, and the district minimum wage on income inequality in Barlingmascakeb during the specified period. The results indicate that the level of inter-regional income inequality in the Barlingmascakeb region is categorized as high, although it has shown a decline in recent years. Furthermore, economic growth and the district minimum wage have a significant negative impact on income inequality in the region . Additionally, economic growth and the district minimum wage significantly reduce income inequality in the Barlingmascakeb Region. In contrast, the unemployment rate does not have a significant effect on income inequality, suggesting that other economic development issues play a more substantial role in shaping inequality in the region. These findings highlight the need for a more inclusive development policy that focuses on strengthening the economies of peripheral areas to sustainably reduce inequality.