The Influence of Inflation, Unemployment, and Economic Growth on Poverty Rate in the Toba Caldera Geopark Region

Abstract

This study examines the influence of inflation, unemployment, and economic growth on the poverty rate in the Toba Caldera Geopark Region of North Sumatra, Indonesia, covering seven regencies — Toba, Samosir, Simalungun, Karo, Dairi, Humbang Hasundutan, and Tapanuli Utara — over the period 2010–2024. The region gained recognition as a UNESCO Global Geopark in 2020, yet persistent socioeconomic disparities continue to hinder equitable development. Using panel data regression with the Fixed Effect Model (FEM) — selected through Chow and Hausman tests — the study finds that unemployment exerts a positive and statistically significant effect on poverty, while inflation has a positive but insignificant effect, and economic growth has a negative yet insignificant effect. The adjusted R-squared of 0.8317 indicates that the three independent variables explain approximately 83% of the variation in poverty rates across the region. Cross-section fixed effects further reveal notable inter-regency heterogeneity, with Humbang Hasundutan recording the highest poverty coefficient and Simalungun the lowest. These findings underscore the critical importance of employment expansion and inclusive economic growth strategies for poverty alleviation in the Toba Caldera Geopark Region.