Analysis of Economic Inequality in Indonesia

Development is carried out to improve the welfare of the community, so that increased economic growth and equitable income distribution are needed. Rapid economic growth that is not matched by equity, will lead to regional disparity. The purpose of this study is to; (1) analyze the factors causing the development imbalance and economic growth in all provinces in Indonesia; (2) analyzing the biggest contributors to development inequality between provinces in Indonesia, (3) forming a model of development inequality and economic growth in each province and Indonesia (4) raising ideas or ideas for solutions to controlling development inequality and economic growth in Indonesia. The variables studied were wiliamson index, human development index, unemployment and General Allocation Funds for each province in Indonesia in 2010-2017. The data observed were primary data and secondary data from various related agencies, such as BI, BPS, BAPPENAS and Ministry of Finance. Before being analyzed, the data will pass the next classical assumption assumption stage with the Panel Data Model. From the results of the study found that the unemployment rate has a negative and significant effect, while the DAU and HDI have a positive and significant effect on the level of inequality in Indonesia.