Published in the International Journal of Business and Applied Economics (IJBAE) in January 2026, the study highlights a critical issue: despite being economic growth centers, metropolitan areas in East Java continue to experience persistent poverty and uneven welfare distribution.
Growth Without Equal Welfare
According to Statistics Indonesia (BPS), East Java remains one of the provinces with the highest number of people living in poverty on Java Island. This condition indicates that strong regional economic potential—supported by industry, trade, and services—has not automatically translated into equitable welfare, particularly in suburban and peripheral metropolitan areas.
To address poverty, the government has allocated substantial social spending through programs such as Non-Cash Food Assistance (BPNT), Health Operational Assistance (BOK), School Operational Assistance (BOS), and Village Funds. However, the real impact of these programs on poverty reduction remains questionable.
Research Approach
The study analyzed secondary data from Statistics Indonesia (BPS) and the Ministry of Finance, covering seven metropolitan regencies and cities in East Java over a six-year period. By comparing changes in social spending and GRDP with poverty trends across regions and time, the researchers identified which policies produced tangible results.
Key Findings
The analysis reveals several important insights:
- GRDP significantly reduces poverty
Regional economic growth plays a decisive role in lowering poverty levels. Increases in GRDP are consistently followed by declines in the number of poor residents.
- Non-Cash Food Assistance shows a positive correlation with poverty
Higher BPNT allocations are associated with rising poverty levels, suggesting weaknesses in targeting accuracy and program effectiveness.
- Health, education, and village spending show no significant impact
BOK, BOS, and Village Funds do not demonstrate a direct or statistically significant effect on poverty reduction during the study period.
Overall, the variables examined explain 98.93 percent of poverty variation, underscoring the strong influence of regional economic performance and fiscal policy on welfare outcomes.
Policy Implications
The findings carry important implications for policymakers. Social assistance programs that focus primarily on consumption are insufficient to reduce poverty without parallel efforts to strengthen productive economic activities.
According to Ahmad Reifaldi Tri Wicaksono of Universitas Negeri Surabaya, economic growth remains the main driver of poverty reduction, but its benefits must be distributed more evenly. Social spending, meanwhile, should move beyond short-term relief and be integrated with economic empowerment programs that expand employment opportunities and household income.
Strengthening labor-intensive sectors, improving the implementation quality of social assistance, and aligning social programs with regional economic strategies are seen as key steps toward more inclusive growth.
Author Profiles
- Ahmad Reifaldi Tri Wicaksono, S.E. - Universitas Negeri Surabaya.
- Risqi Noor Hidayati Putri, S.E., M.E. - Universitas Negeri Surabaya.
Research Source
Wicaksono, A. R. T., & Putri, R. N. H. (2026).
The Effect of Social Expenditure and Gross Regional Domestic Product on Poverty in the East Java Metropolitan Area.
International Journal of Business and Applied Economics (IJBAE), Vol. 5 No. 1.
DOI: 10.55927/ijbae.v5i1.554
URL: https://nblformosapublisher.org/index.php/ijbae
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