Analysis of the effect of wages and reduction of working hours on poverty in Indonesia with gross regional domestic product as moderator

• Main Authors: Harjanto, Nung, Chandra, Agustin M., Nurim, Yavida, Wijaya, Nur Rizki, Susilowati, Indah
• Format: Article
• Published: GMP Press & Printing Co., 2022
• Subjects: HC Economic History and Conditions
• Online Access: http://eprints.um.edu.my/44097/

Poverty is a multidimensional problem that is influenced by many factors that can change according to the circumstances of each region or country. This study aims to analyze the effect of average wages and reduced working hours on poverty with Gross Domestic Regional Product (GRDP) as a moderator. The researcher explores whether her Covid-19 pandemic will affect the outcome of this study. Secondary data is used, namely wages, reduced working hours, GRDP, and poverty in 34 provinces in Indonesia. The regression analysis shows that wages did not directly affect poverty. This is indicated by a significance value of 0.059. This finding shows that there are differences in results from previous studies, where wages have a direct influence on poverty. Furthermore, the GRDP can moderate and strengthens the relationship between wages and poverty, which is indicated by the significant value of wage interaction of 0.000. While reducing working hours has a positive relationship with poverty, GRDP cannot moderate those relationships. This study contributes to the enrichment of literacy related to the relationship of the variables tested against the Vicious Circle of Poverty theory. This research also contributes as a reference for policy makers in making policies related to poverty eradication. Copyright © 2022 GMP Press and Printing.