Dependency Ratio, HDI, and Economic Growth in Central Java

Andre Julian Pratama; Rahmat Alhakim

doi:10.31949/fbmj.v4i1.19714

Authors

Andre Julian Pratama Nahdlatul Ulama Al Ghazali University, Indonesia
Rahmat Alhakim Nahdlatul Ulama Al Ghazali University, Indonesia

DOI:

https://doi.org/10.31949/fbmj.v4i1.19714

Abstract

This study examines the relationship between dependency ratio, human development, and economic growth in Central Java Province. The study uses a quantitative approach with panel data covering 35 regencies/cities for the 2021–2023 period, resulting in 105 observations. Dependency ratio is used as a quantitative proxy for demographic bonus, while the Human Development Index (HDI) represents the quality of human resources and economic growth is measured by the real economic growth rate. Panel regression is estimated using the Fixed Effect Model after model-selection tests, and robust standard errors are used to address heteroskedasticity. The Chow test indicates that the Fixed Effect Model is preferable to the Common Effect Model, while the Hausman test confirms the Fixed Effect Model over the Random Effect Model. The regression results show that the dependency ratio has a negative coefficient of -0.052118 with a probability of 0.2371, indicating no statistically significant partial effect on economic growth. HDI has a positive coefficient of 0.084321 with a probability of 0.2173 and likewise has no statistically significant partial effect. However, the two variables jointly have a significant effect on economic growth, as indicated by an F-statistic probability of 0.006721. The adjusted R-squared of 0.695284 indicates that the model explains approximately 69.53% of the variation in economic growth within the sample. The findings imply that demographic structure and human development should be addressed jointly with employment creation, productive-sector development, and other structural policies.

Keywords:

demographic bonus, dependency ratio, economic growth, demographic bonus; dependency ratio; economic growth; human development index.

Downloads

Download data is not yet available.

References

Adriani, D., & Yustini, T. (2021). Anticipating the demographic bonus from the perspective of human capital in Indonesia. International Journal of Research in Business and Social Science (2147-4478), 10(6), 141–152.

Ahmad, D., & Shah, S. Z. A. (2021). Impact of dependency ratio on economic growth among most populated Asian countries. Journal of Development and Social Sciences, 2(4), 563–579.

Bidisha, S. H., Abdullah, S. M., Siddiqua, S., & Islam, M. M. (2020). How does dependency ratio affect economic growth in the long run? Evidence from selected Asian countries. The Journal of Developing Areas, 54(2).

Bloom, D., Canning, D., & Sevilla, J. (2003). The demographic dividend: A new perspective on the economic consequences of population change. JSTOR.

Capello, R. (2015). Regional economics. Routledge.

Hanushek, E. A., & Woessmann, L. (2020). Education, knowledge capital, and economic growth. The Economics of Education, 171–182.

Headey, D. D., & Hodge, A. (2009). The effect of population growth on economic growth: A meta‐regression analysis of the macroeconomic literature. Population and Development Review, 35(2), 221–248.

Henderson, J. V., Storeygard, A., & Weil, D. N. (2012). Measuring economic growth from outer space. American Economic Review, 102(2), 994–1028.

Hermawan, I. (2019). Analisis pengaruh bonus demografi terhadap pertumbuhan ekonomi. Jurnal Aktiva: Riset Akuntansi Dan Keuangan, 1(2), 32–48.

Herrero, C., Martínez, R., & Villar, A. (2012). A newer human development index. Journal of Human Development and Capabilities, 13(2), 247–268.

Howitt, P., García-Peñalosa, C., & Brant-Collett, M. (1998). Endogenous growth theory. MIT press Cambridge.

Huda, I. U., Karsudjono, A. J., & Darmawan, R. (2021). Analisis Bonus Demografi Terhadap Pertumbuhan Ekonomi Di Provinsi Kalimantan Selatan. Al-KALAM: Jurnal Komunikasi, Bisnis Dan Manajemen, 8(2), 1–21.

Mankiv, N. G. (2018). Pengantar Ekonomi Makro, Ed. 7.

Pawitan, G., Lesmono, D., Aritonang, K., & Diyanah, M. C. (2025). Empowering Rural Communities through Strengthening Village-Owned Enterprises (BUMDes) for Sustainable Socioeconomic Development: A Case Study of Mekarsari Village, Garut Regency. Society, 13(1), 256–274.

Pikushina, M., Shemyakin, A., & Babkin, I. (2018). Analysis of socio-demographic prerequisites for the formation of the region’s human resources. International Scientific Conference" Competitive, Sustainable and Secure Development of the Regional Economy: Response to Global Challenges"(CSSDRE 2018), 569–572.

Pokhrel, S., & Khadka, C. B. (2019). Assessment of long and short run relationship amongst macroeconomic variables and economic growth of Nepal. Economic Journal of Development Issues, 48–87.

Purwati, W. D., & Prasetyanto, P. K. (2022). Analisis pengaruh bonus demografi terhadap pertumbuhan ekonomi di Indonesia. Jurnal Economina, 1(3), 532–546.

Risandini, F., & Silvi, R. (2021). Potencies and threats of the demographic bonus on the quality of human resources and economy in Indonesia 2019. Proceedings of The International Conference on Data Science and Official Statistics, 2021(1), 856–867.

Syukri, M., Mhamut, C., & Sari, I. (2024). DEPENDENCY RATIO, HUMAN DEVELOPMENT INDEX (HDI) ON ECONOMIC GROWTH IN INDONESIA THROUGH SAVINGS. International Conference of Business, Education, Health, and Scien-Tech, 1(1), 94–103.

Wardani, N. A. (2024). Analisis Bonus Demografi Terhadap Pertumbuhan Ekonomi di Pulau Jawa. Jurnal Ilmu Ekonomi JIE, 8(02), 144–151.