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Reducing Regional Inequality for Improved Economic Growth and Development

1. Introduction

Geographical location, transportation, communication and other infrastructure play an important role in the development of a country or region. There are many factors that contribute to regional inequality, but this research aims to measure regional inequalities in the districts of Yogyakarta Special Province, analyzes the factors that contribute to the disproportionate distribution of wealth. The study is conducted by using secondary data sources such as publications from BPS (Central Bureau of Statistics) and other relevant institutions. The data used include Gini ratio, Theil indexes, poverty line, etc.
The study found that there are significant differences in the level of regional inequality among the districts in Yogyakarta Special Province. The highest level of inequality was found in Kulon Progo District followed by Gunung Kidul District. The lowest level of inequality was found in Sleman District. The results also showed that education and gender play an important role in increasing regional inequality. Inequality is higher in the rural areas than in the urban areas. The world economic crisis and the earthquake have had a significant impact on inequality.
The study concludes that there is a need to reduce regional inequality in order to improve the standard of living of the people and to promote economic growth and development.

2. Measuring Regional Inequality

There are various methods that can be used to measure regional inequality. The most commonly used method is the Gini coefficient which measures the distribution of income among individuals or households within a region. Another method is to use Theil indexes which measure the amount of income that is earned by individuals or households at different levels of income.
Income disparities can also be measured by using the poverty line which is the minimum level of income needed to meet basic needs such as food, shelter, clothing, etc. The poverty rate is the percentage of people who live below the poverty line.

3. Theil indexes

The Theil indexes are a class of entropy measures which can be used to measure regional inequality. They were developed by economist Henri Theil in 1967 and are named after him. The most common index is the mean logarithmic deviation which is also known as the first-order index or simply the Theil index.
The Theil index has a number of advantages over other measures of inequality such as the Gini coefficient. Firstly, it is more sensitive to changes at the lower end of the income distribution than the Gini coefficient. Secondly, it takes into account both absolute and relative differences in income which makes it a more holistic measure of inequality. Thirdly, it can be used to compare different regions with each other which makes it a more useful tool for policy makers.

4. The impact of the world economic crisis on inequality

The world economic crisis had a significant impact on regional inequality in Yogyakarta Special Province. The districts that were most affected by the crisis were Kulon Progo and Gunung Kidul which experienced a sharp increase in their Theil indexes during 2008-2009.
The crisis also led to an increase in poverty rates in all districts except for Sleman which actually experienced a reduction in its poverty rate during this period.

5. The impact of the earthquake on inequality

The 2006 Yogyakarta earthquake had a significant impact on regional inequality as well. The quake caused widespread damage in Kulon Progo and Gunung Kidul which led to a sharp increase in their Theil indexes.
The earthquake also had a negative impact on poverty rates with all districts except for Sleman experiencing an increase in poverty during this period.

6. Education and inequality

Education plays an important role in reducing regional inequality. The districts of Kulon Progo and Gunung Kidul have the lowest levels of educational attainment which contributes to their high levels of inequality.
Sleman has the highest level of educational attainment which helps to explain its lower level of inequality.

7. Gender and inequality

Gender also plays a role in increasing regional inequality. The districts of Kulon Progo and Gunung Kidul have a higher proportion of male residents which contributes to their higher levels of inequality.

8. Urban and rural setting

Inequality is generally higher in the rural areas than in the urban areas. The districts of Kulon Progo and Gunung Kidul are both predominantly rural which contributes to their high levels of inequality.

9. Conclusion

There is a need to reduce regional inequality in order to improve the standard of living of the people and to promote economic growth and development. Education and gender play an important role in increasing regional inequality. Inequality is higher in the rural areas than in the urban areas. The world economic crisis and the earthquake have had a significant impact on inequality.

FAQ

The main causes of regional inequality in Yogyakarta Special Province are uneven development between rural and urban areas, disparities in access to education and health care, and unequal distribution of resources.

Regional inequality has increased over time in Yogyakarta Special Province due to the rapid growth of the urban economy and the decline of agriculture.

The consequences of regional inequality in Yogyakarta Special Province include social unrest, economic stagnation, and environmental degradation.

Different socioeconomic groups experience regional inequality in Yogyakarta Special Province differently depending on their location, occupation, and level of education.

Government policy is responsible for creating or alleviating regional inequality in Yogyakarta Special Province to some extent, but other factors such as market forces also play a role.

To reduce regional inequality in Yogyakarta Special Province, government policies should focus on promoting rural development, improving access to education and health care, and reducing disparities in resource distribution.

There is a risk that efforts to reduce regional inequality could unintentionally make other forms of inequalities worse off if they are not properly designed and implemented.

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