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FINANCIAL INCLUSION AND POVERTY REDUCTION IN ACEH PROVINCE: COMPARISON BETWEEN CORE REGION AND PERIPHERY REGION

ALIASUDDIN

Associate Professor at the Department of Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh, Indonesia

aliasuddin@unsyiah.ac.id

Taufiq C. DAWOOD

Assistant Professor at the Department of Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh, Indonesia

taufiq.dawood@unsyiah.ac.id

Nanda RAHMI

Assistant Professor at the Department of Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh, Indonesia

nanda_rahmi84@unsyiah.ac.id

Abstract

This study analyzes the role of financial inclusion on poverty reduction in Aceh Province, the comparison between the core region (Banda Aceh) and periphery region (Aceh Besar).  This study uses cross-sectional data from Banda Aceh and Aceh Besar with sample total of 598 and 686 households, respectively.  The logistic model is used in this study.  The results show that financial inclusion is negatively not significant in Banda Aceh but negatively significant in Aceh Besar.  Meanwhile, sex and educational level are negatively significant in Banda Aceh and Aceh Besar, and family size is positively significant in both regions.  The biggest marginal effect on poverty is sex in Banda Aceh and Aceh Besar regions.  Female is more vulnerable to be poor compared to male in term of poverty

Keywords: financial inclusion, Aceh, poverty reduction, logistic

JEL classification: N95, B23, B26, I32

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FINANCIAL INCLUSION AND HUMAN CAPITAL INVESTMENT IN URBAN AND RURAL: A CASE OF ACEH PROVINCE

Nanda RAHMI

Assistant Professor at the Departement of Economics, Fakultas Ekonomi dan Bisnis, Universitas Syiah Kuala, Banda Aceh, Indonesia

nanda_rahmi84@unsyiah.ac.id

ALIASUDDIN

Associate Professor at the Department of Economics, Fakultas Ekonomi dan Bisnis, Universitas Syiah Kuala, Banda Aceh, Indonesia

aliasuddin@unsyiah.ac.id

Abstract

this study is to analyze the effects of financial inclusion and other variables on human capital investment in urban dan rural region of Aceh Province by using pooled regression model with sample size total of 800 households.   The results show that financial inclusion and income have a positive and significant effect on human capital investment, whereas family size has negative and significant.  Furthermore, male and urban have bigger effects on human capital investment than female and rural region, respectively.   Meanwhile, age has a bell-shaped to human capital investment indicates that the higher age smaller human capital investment.  The last, the average of years of schooling in urban and rural regions is nine-year means the education level of these regions is junior high school.   It is recommended that government should encourage banking to increase their services to a rural area in order to increase human capital investment.

Keywords: Financial Inclusion, Human Capital Investment, Aceh Province, Indonesia

JEL classification: G5, I210, D1, J170

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