Impact Of Mining Sector To Poverty And Income Inequality In Indonesia A Panel Data Analysis

Abstract Since the decentralization was implemented by Indonesia government in the last decade the provincial government has more powerful authority to use and manage on the own provinces. The use of natural resources is blessed by the God for community welfare. By using 30 provincial cross-section data that the mining sector has a negative affected and statistically significant to economic growth and it has unsignificantly affected for decreasing poverty and also unsignificant for income inequality in Indonesia. The purpose of this research is to understand the affect of mining sector to poverty and income inequality in Indonesia from 2002 to 2011. The research used explanatory method by using time-series and cross-section data and applied a two stage simultaneous equation method 2SLS. The important finding in this research is a mining sector had a negative impact on economic growth and economic growth was not significant statistically for poverty reduction b inflation did not have any impact on economic growth and had a positive impact poverty headcount poverty gap and poverty severity and c economic growth had positive impact on income inequality.