The Effect of Government Capital Expenditure, Dependency Ratio, and the Number of Poor Population on the Human Development Index in North Sumatra Province, 2000–2024

Abstrak

This study analyzes the effect of government capital expenditure, the dependency ratio, and the number of poor population on the Human Development Index (HDI) in North Sumatra Province over the period 2000–2024. The HDI is used as an indicator of the population's quality of life, covering the dimensions of health, education, and a decent standard of living. Using a quantitative approach, the study relies on secondary time-series data published by the Central Bureau of Statistics (Badan Pusat Statistik, BPS) of North Sumatra Province and applies multiple linear regression to examine the relationship between the independent variables and HDI. The results show that government capital expenditure has a positive but not statistically significant effect on HDI, while the dependency ratio and the number of poor population each have a negative and statistically significant effect. Jointly, the three variables explain approximately 83.3% of the variation in HDI (R² = 0.8328) and are together statistically significant (F = 28.228; p < 0.01). These findings indicate that a high dependency burden and a high incidence of poverty are the main obstacles to human development in North Sumatra, whereas the effectiveness of capital spending — not merely its magnitude — determines its contribution to human development outcomes. The study recommends integrated policy measures that improve the targeting of capital expenditure, reduce the dependency burden through productive employment and skills development, and accelerate poverty reduction, in order to promote sustainable human development in North Sumatra Province.