ECONOMIC WELFARE
Conference Title: 3rd International
Conference on “Trends in Multidisciplinary Business and Economic Research”
(TMBER 25-26 March 2016). TMBER©2016 Global Illuminators Bangkok, Thailand
Study Title: The Gap of Resources Allocation and Income Inequality
Author
1:
Nikensari, Sri, Indah*. Universitas Negeri Jakarta, Indonesia.
Author
2:
Santosa, Purbayu, Budi. Universitas Diponegoro, Indonesia.
Author 3: Sugiyanto,
FX. Universitas Diponegoro, Indonesia.
Presenter: Nikensari, Sri,
Indah
Correspondence: Nikensari, Sri, Indah
*Student of Doctoral Program at Universitas Diponegoro, Indonesia
ABSTRACT
In recent years,
many countries have a Gini index above 0.4, a quantity index that
get warning limits
by UNDP. According
to the development of the theory of welfare economics (first
theorem), income inequality
occurs because the allocation of resources
in a country is
not distributed equitably.
Research with the
secondary data from Indonesia,
aims to prove that
the increase in resources allocation
gap will increase
income inequality. Education Gap, Labor Skill Mismatch and Credit Allocation Gap
are developed and derived from the gap of resources
allocation as independent variables.
All of the data obtained from the Central Bureau of Statistics, except data relating to credit
allocation Gap, this is obtained from the
Central Bank of Indonesia. Using data from
33 provinces in Indonesia during 2007-2013, the results of data processing of
each variable indicates that the gap of resources allocation has increased
during the years of the study. The results of the panel data analysis shows
that all independent variables have a positive effect to income inequality. The results of this study prove
that in achieving welfare,
it is necessary to allocate resources
efficiently (first theorem) and equitably, especially for the
lower levels of society. The
results also proved that to
look at the causes of income inequality in the process of economic growth, we recommend using a variable gap.
Keywords: First Theorem, Income
Inequality, Gap of Resources Allocation.
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