The Effect of the Defense Budget on Income Inequality in Indonesia

This study aims to determine the effect of the defense budget on income inequality in Indonesia. The independent variable used in this variable is the defense budget, as well as other independent variables, namely economic growth and investment. The dependent variable used is income inequality. The data series used in this study was for 20 years from 2000 to 2019. The analysis technique used in this study was multiple linear regression using the Ordinary Least Square (OLS) method. Prior to the regression analysis, the classical assumption test was carried out which included normality test, heteroscedasticity test, multicollinearity test, and autocorrelation test. Hypothesis testing using t test (partial) and F test (simultaneous). The results showed that partially all independent variables, namely the defense budget and other independent variables, namely economic growth and investment had a significant effect on income inequality. The defense budget has a significant effect on income inequality with a probability value of 0.0223 and has a positive regression coefficient value of 0.0498. Simultaneously all independent variables have a significant effect on income inequality with a determination value of 88.5 percent