AIDS SOCIAL EXPENDITURES, POVERTY AND INEQUALITY IN TIME OF COVID-19 PANDEMIC IN INDONESIA
DOI:
https://doi.org/10.21837/pm.v22i33.1546Keywords:
COVID-19, Aids Social Expenditures, Poverty, InequalityAbstract
The research investigates the correlation between social aid expenditure and poverty, and inequality across 34 Indonesian provinces from 2004 to 2022. Utilizing the two-step Generalized Method of Moments (GMM) estimate, it examines the impact of social aid expenditure on poverty rates and the Gini coefficient during the COVID-19 pandemic. Results show a significant decrease in the proportion of the impoverished population due to social aid expenditure, with minimal effects on inequality. The study highlights a substantial increase in both poverty and inequality during the pandemic, particularly in rural and urban areas. Analyzing the relationship between social welfare spending and COVID-19 impact reveals a positive influence on disadvantaged populations and inequality in Indonesian provinces. This underscores the need for a comprehensive review of social aid programs, especially amidst COVID-19 challenges.
Downloads
References
Achmad, G. N., Yudaruddin, R., Budiman, P. W., Santi, E. N., Suharsono, Purnomo, A. H., & Wahyuningsih, N. (2023). Eco-Innovation and SME Performance in Time of Covid-19 Pandemic: Moderating Role of Environmental Collaboration. Emerging Science Journal, 7(Special issue 2), 251–263. https://doi.org/10.28991/ESJ-2023-SPER-018
Achmad, G. N., Fitriansyah, F., Lesmana, D. Yudaruddin, R. (2024). The Impact of Social Media on Online Shopping Behavior of Gen Z Consumers in Time of Covid-19 Pandemic. WSEAS Transactions on Business and Economics, 21, 266-279. https://doi.org/10.37394/23207.2024.21.24
Ahmad, Y., Mustapha, S. Z., Ali, S. S. M., Hamid, S. N. F. A., Aziz, N. A., Tahir, N. S., Azman, U. N. N., Zamri, N. E. M. M., Jamil, A. A. A., Ayob, N. A., Aziz, M. N., Hanafiah, M. H., Arsat, A. R., & Hassan, M. S. N. A. (2023). From Crisis To Recovery: Malaysia’S Policy Responses To Covid-19 and Its Implications. Planning Malaysia, 21(6), 526–546. https://doi.org/10.21837/PM.V21I30.1418
Anderson, E., d’Orey, M. A. J., Duvendack, M., & Esposito, L. (2018). Does Government Spending Affect Income Poverty? A Meta-regression Analysis. World Development, 103, 60–71. https://doi.org/10.1016/j.worlddev.2017.10.006
Arellano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of Econometrics, 68(1), 29–51. https://doi.org/10.1016/0304-4076(94)01642-D
Arndt, C., Jones, S., & Tarp, F. (2015). Assessing Foreign Aid’s Long-Run Contribution to Growth and Development. World Development, 69, 6–18.
Bargain, O., & Aminjonov, U. (2021). Poverty and COVID-19 in Africa and Latin America. World Development, 142, 105422.
Bassey, E. E., Gupta, A., Kapoor, A., & Bansal, A. (2022). COVID-19 and Poverty in South America: the Mental Health Implications. International Journal of Mental Health and Addiction, 24, 1–7.
Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115–143. https://doi.org/10.1016/S0304-4076(98)00009-8
Caminada, K. (2001). International Trends in Income Inequality. Public Finance, 395–415.
Castro-Leal, F., Dayton, J., Demery, L., & Mehra, K. (2000). Public spending on health care in Africa: Do the poor benefit? Bulletin of the World Health Organization, 78(1), 66–74.
Chriest, A., & Niles, M. (2018). The role of community social capital for food security following an extreme weather event. Journal of Rural Studies, 64(February), 80–90. https://doi.org/10.1016/j.jrurstud.2018.09.019
Cuong, N. V. (2013). The Impact of Social Security on Household Welfare: Evidence from a Transition Country. European Journal of Development Research, 25(5), 737–757. https://doi.org/10.1057/ejdr.2013.11
da Rosa, P. R., Fochezatto, A., Neto, G. B., & Sanguinet, E. R. (2021). Social protection and COVID-19: Evaluation of regional impacts of the Emergency Aid policy in Brazil. EconomiA, 22(3), 239–250.
De Matteis, A. (2013). Relevance of poverty and governance for aid allocation. Review of Development Finance, 3(2), 51–60. https://doi.org/10.1016/j.rdf.2013.04.001
Defung, F., Hadjaat, M., and Yudaruddin, R. (2023). COVID-19 pandemic and firm performance in leisure, arts, and hospitality industries: international evidence. Investment Management and Financial Innovations, 20(4), 112–126. https://doi.org/10.21511/imfi.20(4).2023.10
Devereux, S. (2002). Can social safety nets reduce chronic poverty? Development Policy Review, 20(5), 657–675. https://doi.org/10.1111/1467-7679.00194
Deviyanti, D. R., Ramadhani, H., Ginting, Y. L., & Fitria, Y. (2023). A Global Analysis of the COVID-19 Pandemic and Capital Structure in the Consumer Goods Sector. Journal of Risk and Financial Management, 16(11), 472. https://doi.org/https://doi.org/10.3390/jrfm16110472
Drèze, J., & Khera, R. (2017). Recent Social Security Initiatives in India. World Development, 98, 555–572. https://doi.org/10.1016/j.worlddev.2017.05.035
Firmansyah, A. D., & Solikin, A. (2019). Impact of Social Assistances on Poverty and Inequality: Rastra, PIP, and PKH programs in Indonesia. Jurnal BPPK, 12, 53–70.
Gomanee, K., Girma, S., & Morrissey, O. (2005). Aid, public spending and human welfare: Evidence from quantile regressions. Journal of International Development, 17(3), 299–309. https://doi.org/10.1002/jid.1163
Gungor, M. (2021). COVID-19 Aspect of Poverty: Children Living and Working on the Street. In A New Social Street Economy: An Effect of the COVID-19 Pandemic (pp. 217–229).
Gupta, S., Verhoeven, M., & Tiongson, E. R. (2002). The effectiveness of government spending on education and health care in developing and transition economies. European Journal of Political Economy, 18(4), 717–737. https://doi.org/10.1016/S0176-2680(02)00116-7
Ha, T. (2023). The effects of COVID-19 and response measures on poverty, household income and household consumption expenditure in South Korea. 50(1), 3–17. https://doi.org/10.1108/JES-09-2021-0453
Handayani, S., Suharno, S., & Badriah, L. S., (2022). The Effectiveness of Local Government Spending on Poverty Rate Reduction in Central Java, Indonesia. Eko-Regional: Jurnal Pembangunan Ekonomi Wilayah, 17(1):1–8. https://doi.org/10.32424/1.erjpe.2022.17.1.1848
He, L., & Sato, H. (2013). Income redistribution in urban china by social security system-an empirical analysis based on annual and lifetime income. Contemporary Economic Policy, 31(2), 314–331. https://doi.org/10.1111/j.1465-7287.2011.00301.x
Hilmawan, R., Aprianti, Y., Vo, D. T. H., Yudaruddin, R., Bintoro, R. F. A., Fitrianto, Y., & Wahyuningsih, N. (2023). Rural development from village funds, village-owned enterprises, and village original income. Journal of Open Innovation: Technology, Market, and Complexity, 9(4), 100159. https://doi.org/10.1016/j.joitmc.2023.100159
Hilmawan, R., Aprianti, Y., Yudaruddin, R., Anggraini Bintoro, R. F., Suharsono, Fitrianto, Y., & Wahyuningsih, N. (2023). Public sector innovation in local government and its impact on development outcomes: Empirical evidence in Indonesia. Heliyon, 9(12), e22833. https://doi.org/10.1016/j.heliyon.2023.e22833
Hudayah, S., Ramadhani, M A., Raharjo, S., Ambarita, N, P., Hidayani, H., Yudaruddin, R., (2024). "The Impact of Knowledge Management on Digital Innovation in Time of Covid-19 Pandemic: The Role of Digital Capability and Digital Orientation," WSEAS Transactions on Business and Economics, vol. 21, pp. 1276-1285, DOI:10.37394/23207.2024.21.104
Irwansyah, Pribadi, M. I., Roy, A., Yanti, D., Yudaruddin, Y. A., & Yudaruddin, R. (2024). COVID-19 pandemic and cash holding in consumer goods sector: International evidence. Risk Governance and Control: Financial Markets & Institutions, 14(1), 138–149. https://doi.org/10.22495/rgcv14i1p10
Kheir, V. B. (2018). The nexus between financial development and poverty reduction in Egypt. Review of Economics and Political Science, 3(2), 40–55. https://doi.org/10.1108/REPS-07-2018-003
Kiendrebeogo, Y., Assimaidou, K., & Tall, A. (2017). Social protection for poverty reduction in times of crisis. Journal of Policy Modeling, 39(6), 1163–1183. https://doi.org/10.1016/j.jpolmod.2017.09.003
Kochaniak, K., Ulman, P., & Zajkowski, R. (2023). Effectiveness of COVID-19 state aid for microenterprises in Poland. International Review of Economics & Finance, 86, 483–497.
Langi, C. R., Lufi Zulfikar, A., Maulana, I., Widayati, N., & Yudaruddin, R. (2023). The impact of social aid on poverty during the COVID-19 pandemic: Empirical evidence from Indonesia. Public and Municipal Finance, 12(2), 104–116. https://doi.org/10.21511/pmf.12(2).2023.09
Langi, C. R., Raharjo, S., Mahardika, S. G., Pramono, A. T., Yudaruddin, R., & Yudaruddin, Y. A. (2024). FinTech P2P lending and bank loans in time of COVID-19. Risk Governance and Control: Financial Markets & Institutions, 14(1), 111–121. https://doi.org/10.22495/rgcv14i1p8
Lesmana D., Yudaruddin R. (2024). Market Reaction to COVID-19 and Policy Response Across Different Sectors: An Event Study on ASEAN Stock Market. Finance: Theory and Practice. 28(1):30-42. https://doi.org/10.26794/2587-5671-2024-28-1-30-42
Lestari, D., Zainurossalamia, S. Z. A., Maria, S., Wardhani, W., & Yudaruddin, R. (2021). The impact of COVID-19 pandemic on performance of small enterprises that are e-commerce adopters and non-adopters. Problems and Perspectives in Management, 19(3), 467–477. https://doi.org/10.21511/ppm.19(3).2021.38
Lustig, N., Pessino, C., & Scott, J. (2014). The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico, Peru, and Uruguay: Introduction to the Special Issue. Public Finance Review, 42(3), 287–303. https://doi.org/10.1177/1091142113506931
Mahler, Vincent; Jesuit, D. (2004). State redistribution in comparative perspective: A cross-national analysis of the developed countries. LIS Working Paper Series, 392(392).
Maria, S., Yudaruddin, R., & Yudaruddin, Y. A. (2022). The impact of COVID-19 on bank stability: Do bank size and ownership matter? Banks and Bank Systems, 17(2), 124–137. https://doi.org/10.21511/bbs.17(2).2022.11
Meehan, P., & Shanks, T. (2023). Poverty Reduction is Not the Whole Story: The COVID-19 Pandemic Response in Relation to Material Hardship. Journal of Family and Economic Issues, 16, 1–12.
Menta. (2021). Poverty in the COVID-19 Era: Real-time Data Analysis on Five European Countries. In Research on Economic Inequality: Poverty, Inequality and Shocks (pp. 209–247).
Mosley, P., Hudson, J., & Verschoor, A. (2004). Aid, poverty and the “New Conditionality”. The Economic Journal, 114(496), 217–243.
Musviyanti, Khairin, F. N., Bone, H., Syakura, M. A., & Yudaruddin, R. (2022). Structure of local government budgets and local fiscal autonomy: Evidence from Indonesia. Public and Municipal Finance, 11(1), 79–89. https://doi.org/10.21511/pmf.11(1).2022.07
Muta’ali, L., Izzudin, M., & Santoso, A. D. (2024). Inter-Regional Poverty Disparities in Java, Indonesia: An Analysis of Key Influencing Factors (2010-2020). Planning Malaysia, 22(31): 470-485. https://doi.org/10.21837/pm.v22i31.1483
Nazareno, L., & de Castro Galvao, J. (2023a). The Impact of Conditional Cash Transfers on Poverty, Inequality, and Employment During COVID-19: A Case Study from Brazil. Population Research and Policy Review, 42(22).
Nazareno, L., & de Castro Galvao, J. (2023b). The Impact of Conditional Cash Transfers on Poverty, Inequality, and Employment During COVID-19: A Case Study from Brazil. Population Research and Policy Review, 42, 22.
Nurlia, Susilowati, D., Dahniyar, Ernayani, R., Yudaruddin, Y. A., & Yudaruddin, R. (2023). Performance of energy sector companies in time of pandemic COVID-19; International evidence. Research in Globalization, 7(July), 100177. https://doi.org/10.1016/j.resglo.2023.100177
Paminto, A., Lahaya, I. A., Iqbal, M., Yudaruddin, Y. A., & Yudaruddin, R. (2023). COVID-19 pandemic and firm performance in the insurance industry in developed and emerging markets. Insurance Markets and Companies, 14(1), 85–98. https://doi.org/10.21511/INS.14(1).2023.08
Pham, T. H., & Riedel, J. (2019). Impacts of the sectoral composition of growth on poverty reduction in Vietnam. Journal of Economics and Development, 21(2), 213–222. https://doi.org/10.1108/jed-10-2019-0046
Ren-fu, L. U. O., Cheng-fang, L. I. U., Jing-jing, G. A. O., Tian-yi, W., Hua-yong, Z. H. I., & Peng-fei, S. H. I. (2020). Impacts of the COVID-19 pandemic on rural poverty and policy responses in China. Journal of Integrative Agriculture, 19(12), 2946–2964. https://doi.org/10.1016/S2095-3119(20)63426-8
Riadi, S. S., Hadjaat, M., & Yudaruddin, R. (2022). Bank Concentration and Bank Stability during the COVID-19 Pandemic. Emerging Science Journal, 6(Special Issue), 262–274. https://doi.org/10.28991/esj-2022-sper-018
Riadi, S. S., Heksarini, A., Lestari, D., Maria, S., Zainurossalamia, S., & Yudaruddin, R. (2022). The Benefits of e-Commerce before and during the Covid-19 Pandemic for Small Enterprises in Indonesia. WSEAS Transactions on Environment and Development, 18, 69–79. https://doi.org/10.37394/232015.2022.18.8
Rönkkö, R., Rutherford, S., & Sen, K. (2022). The impact of the COVID-19 pandemic on the poor: Insights from the Hrishipara diaries. World Development, 149, 105689.
Rosni, N. A., & Zainol, R. (2022). Transformative_Impact_of_Covid_19_Pandemic_on_the_. 20(5), 272–286.
Suryahadi, A., Al Izzati, R., & Suryadarma, D. (2020). The Impact of COVID-19 Outbreak on Poverty: An Estimation for Indonesia (Draft). SMERU Working Paper, April (April), 1–20. http://smeru.or.id/en/content/impact-covid-19-outbreak-poverty-estimation-indonesia
Topcu, E. (2022). The impact of COVID-19 on regional poverty: Evidence from Latin America. In COVID-19 and the Sustainable Development Goals (pp. 399–412).
Ulfah, Y., Ambarita, N. P., Hidayani, Yudaruddin, R., & Lesmana, D. (2022). Board Structure and Earning Management: a Comparative Study Between the Pre-Pandemic and During the Covid-19 Pandemic Periods. Corporate and Business Strategy Review, 3(2), 177–187. https://doi.org/10.22495/cbsrv3i2art16
Valensisi, G. (2020). COVID-19 and Global Poverty: Are LDCs Being Left Behind? The European Journal of Development Research, 20, 1535–1557.
Wahyuni, S. Bustami, A., Fitriah, R. R. A., AF., M. S. F., and Yudaruddin, R. (2024). The impact of fintech peer-to-peer lending and Islamic banks on bank performance during COVID-19. Banks and Bank Systems, 19(1), 195-207. https://doi.org/10.21511/bbs.19(1).2024.17
Yu, L. rong, & Li, X. yun. (2021). The effects of social security expenditure on reducing income inequality and rural poverty in China. Journal of Integrative Agriculture, 20(4), 1060–1067. https://doi.org/10.1016/S2095-3119(20)63404-9
Yudaruddin, R. (2023). Bank lending during the COVID-19 pandemic: do alliances and digital strategies matter? Managerial Finance, 49(7), 1221–1238. https://doi.org/10.1108/MF-04-2022-0167
Yudaruddin, R. (2023). Government policy response to COVID-19 and bank performance: a comparison between Islamic and conventional banks. Journal of Islamic Accounting and Business Research, 14(6), 952–972. https://doi.org/10.1108/JIABR-09-2022-0248
Yusri, A. (2022). Does Government Expenditure Affect Poverty, Health, and Education? Evidence from Aceh, Indonesia. Jurnal Perencanaan Pembangunan: The Indonesian Journal of Development Planning, 6(1), 1–20. https://doi.org/10.36574/jpp.v6i1.249
Zulkarnain, S. H., Nawi, A. S., & Mohd Aini, A. (2023). The Effects of Covid-19 on Residential Property Prices in Malaysia. Planning Malaysia, 21(26): 184-197. https://doi.org/10.21837/pm.v21i26.1270
Zwane, T., Biyase, M., & Rooderick, S. (2022). Assessing the impact of social grants on household welfare using propensity score matching approach. International Journal of Development Issues, 1(1), 1–10.
Downloads
Published
How to Cite
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 Unported License.
Copyright & Creative Commons Licence
eISSN: 0128-0945 © Year. The Authors. Published for Malaysian Institute of Planners. This is an open-access article under the CC BY-NC-ND license.
The authors hold the copyright without restrictions and also retain publishing rights without restrictions.
