The Impact of Regional Economic Growth on Community Welfare in Indonesia: An Empirical Analysis and Policy Implications

Abstract

Economic growth is a key factor in improving community welfare, but its impacts can vary across regions. Community welfare is one of the goals of the Sustainable Development Goals (SDGs), which reflects the government's success in developing a country's economy. This study aims to analyze the effect of regional economic growth on community welfare in Indonesia using an empirical approach based on panel data. The data used in this study comes from the BPS and various relevant agencies over a specific period. The economic growth indicator is measured by Gross Regional Domestic Product (GRDP) per capita, local government expenditure, and income distribution, while community welfare is measured using the Human Development Index (HDI). The analytical method employed is Ordinary Least Squares (OLS) regression with a panel data approach to examine the relationship between economic growth variables and community welfare across different regions. The policy implications of this study emphasize the importance of equitable economic growth across regions, as well as increased investment in the education and social sectors to ensure that the benefits of economic growth can be distributed more evenly. Therefore, the government needs to design more inclusive and evidence-based policies to sustainably enhance community welfare.