Tag: Government Expenditure

DOES HUMAN CAPITAL INVESTMENT MATTER FOR GROWTH? EVIDENCE FROM INDONESIA DURING THE FISCAL DECENTRALIZATION ERA

Losina PURNASTUTI

Faculty of Economics
Yogyakarta State University Kampus Karangmalang Yogyakarta 55281 Indonesia
losina_purnastuti@uny.ac.id
(Corresponding author)

Bambang SUPRAYITNO

Faculty of Economics
Yogyakarta State University Kampus Karangmalang Yogyakarta 55281 Indonesia
bambang_s@uny.ac.id

SUGIHARSONO

Faculty of Economics
Yogyakarta State University Kampus Karangmalang Yogyakarta 55281 Indonesia
sugiharsono@uny.ac.id

Abstract

The purpose of this study is to investigate the role of regional government expenditure, workers’ education level, and government expenditure for health and education sector in economic growth by using secondary data published by National Bureau of Statistics Indonesia. Panel data estimation approach was adopted to analyze the data. The result of the study shows that education contributes significantly to the improvement of labor productivity. Other findings indicate that the population has positive impacts on various aspects of human development and labor productivity while the total area owned by the local goverment has no effect on both of the two aspects aforementioned. It implies that human resource is an essential component for economic growth and for human development itself.

Keywords: Human Capital Investment, Government Expenditure, Fiscal Decentralization.

JEL classification: H51, H52, H72, H75
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