The Effect of Human Development Index (HDI) and Labor Force Participation Level (LFP) on Poverty in West Aceh District

Abstract

This study aims to analyze the effect of the Human Development Index (HDI) and the Labor Force Participation Rate (LFP) on poverty in Southwest Aceh Regency. This research method uses multiple linear regression analysis with secondary data from the Central Statistics Agency (BPS) and related agencies in the period 2014-2023. The results of the study indicate that the HDI and LFP have a positive and significant effect on poverty rates, meaning that an increase in the HDI tends to increase poverty rates. This happens because even though the HDI increases, if the quality of education and health services available are not up to standard or are uneven, poverty can remain high. In this context, an increase in the HDI can worsen inequality, if it is not accompanied by equitable development. Then, although an increase in LFP is considered a positive indicator of high economic activity, it could be that a high LFP is actually correlated with high poverty if the types of jobs available do not generate enough income to meet basic needs. Work in the informal sector with low wages and no social security often increases poverty rates among the population even though they are involved in the world of work. These findings indicate the importance of efforts to improve the quality of human resources and create jobs to reduce poverty levels in Aceh Barat Daya District. Recommendations from this study include increasing access to education and health and strengthening employment policies to support inclusive economic growth.