Title:
The Influence of Sharia Financial Inclusion and Unemployment Rate on Income Inequality in Indonesia

Authors:
Ade Arin Capriansyah Putri, Metasari Kartika, dan Yarlina Yacoub, Indonesia

Abstract:

Income inequality can hamper economic growth if it gradually reaches a high point. This research aims to analyze the influence of sharia financial inclusion and unemployment rates on income inequality in Indonesia. The independent variables were measured using data on sharia bank office networks, third party funds, and the open unemployment rate. For the dependent variable, Gini index data obtained from the Financial Services Authority and the Central Statistics Agency is used. The research was conducted from 2016 to 2023 and involved 33 provinces in Indonesia. The method used is quantitative research with panel data regression analysis, processing data using Eviews 13. This research concludes that the sharia bank office network, third party funds, and the unemployment rate together have a significant influence on income inequality. In contrast, this study finds that bank office networks and third party funds have an influence on income inequality, while the unemployment rate does not affect income inequality. It can be said that sharia financial inclusion, which is measured using sharia bank office network data and third party funds, has an effect on reducing income inequality in Indonesia, this is because sharia financial inclusion can provide financial access and services to low-income people so that they can build assets and increase their income. wealth by setting up your own business and creating jobs.

DOI: https://doi.org/10.51505/IJEBMR.2024.8612