RELATIONSHIP BETWEEN HUMAN DEVELOPMENT INDEX AND ECONOMIC GROWTH IN INDONESIA USING SIMULTANEOUS MODEL

Abstract

This research aims to provide contribution for the success of the development process that can done by local and central governments, which are basically the regulator of economic activity. Full commitment of the government as a facilitating institution in the economy perfectly understands the need for human resources to increase quality of life so that the goal of human development can be successful. This research was performed on problems that occur in various regions of Indonesia, for example, the inequality of economic growth and development of human quality in the western and eastern regions of Indonesia. A more visible phenomenon can also be found in the various regions of Indonesia, which has experienced looped economic growth and human development. This was a quantitative research and the subjects were all provinces in Indonesia. The type of data used were secondary data using panel data from 34 provinces in the 2015-2019 period. Data were collected using observation and documentation techniques, and then the data were analyzed using simultaneous analysis (2SLS) technique. The results indicated that education, public expenditure on education, economic growth and poverty provided a significant effect on the human development index, so total government expenditure and the human development index provided a significant effect on economic growth.