Jurnal Ekonomi dan Bisnis .
Volume 5.
Nomor 1 .
age 1-.
e-ISSN 2961Oe8169.
Accredited SINTA 4 Analysis of the Effect of Economic Growth.
Open Unemployment Rate, and Capital Expenditure on Income Disparity Daya Amarta Suwarjana1*.
Niniek Imaningsih2 1,2Universitas Pembangunan Nasional AuVeteranAy Jawa Timur.
Surabaya.
Indonesia
ARTICLE INFORMATION
A B S T R A C T
Received: May 4, 2025 Revised: January 31, 2026 Accepted: April 1, 2026 Income disparity is an important issue in regional development as it reflects inequality in the distribution of welfare across regions or social groups.
This study aims to analyze the effect of regional economic growth, open unemployment rate, and regional government capital expenditure on income disparity in Pacitan Regency and Wonogiri Regency during the period 2010Ae2023.
This research employs a quantitative approach using secondary data obtained from the Central Statistics Agency (BPS) of East Java and Central Java Provinces, as well as BPS of Pacitan Regency and Wonogiri Regency.
The study population consists of annual socio-economic indicator data, with a total sampling technique of 14 years of observation for each regency.
Data analysis is conducted using multiple linear regression with the assistance of IBM SPSS 25 software.
The partial test results indicate that the effects of independent variables on income disparity differ between regions.
In Pacitan Regency, regional economic growth and open unemployment rate have no significant effect on income disparity, while capital expenditure has a positive and significant effect.
Conversely, in Wonogiri Regency, regional economic growth and open unemployment rate have a negative and significant effect on income disparity, whereas capital expenditure has no significant effect.
These findings provide policy implications for local governments in designing more equitable and inclusive development strategies.
DOI : 10.
57151/jeko.
KEYWORDS
capital expenditure.
economic growth.
open unemployment rate
CORRESPONDING AUTHOR
Name : Daya Amarta Suwarjana Address: Surabaya E-mail : dayaamarta77@gmail.
INTRODUCTION
Income inequality is a structural problem commonly faced by developing countries, including Indonesia.
It represents a major challenge in national development as it can hinder poverty alleviation efforts and generate social as well as economic instability.
High open unemployment rates, uneven regional economic growth, and limited access to infrastructure are among the primary factors that exacerbate income inequality.
Therefore, one of the main objectives of national development is to achieve sustainable and inclusive economic growth so that economic welfare can be distributed more evenly across society (Sari et al.
, 2.
Regional income disparity remains a fundamental and unresolved issue in Indonesia.
Regions with adequate infrastructure and abundant resources tend to experience accelerated economic growth, while other regions lag behind due to limited access and investment.
Pacitan Regency and Wonogiri Regency represent two regions with distinct geographical and socio-economic characteristics.
however, both face significant challenges related to income inequality.
This study is designed to identify and analyze the effects of economic growth, open unemployment rates, and capital expenditure on income disparity in these two regions.
In this study, economic growth is defined as regional economic growth measured by the growth rate of Gross Regional Domestic Product (GRDP) at constant prices.
Regional economic development plays a crucial role in reducing socio-economic disparities.
The Indonesian government has emphasized the importance of inclusive economic development, not only through increases in GRDP but also through improvements in education, health, and equitable distribution of development outcomes(Lestari et al.
, 2.
Effective allocation of capital expenditure is considered capable of creating employment opportunities and attracting investment, which in turn promotes economic growth and more equitable welfare distribution(Tjahjanto et al.
, 2.
Previous studies indicate that income inequality is closely associated with geographical differences, demographic conditions, and access to resources.
Hidayadi & Niam .
argue that regions with limited resources and poor infrastructure are more vulnerable to economic inequality.
Meanwhile.
Suryono .
emphasizes that well-planned economic development can improve welfare and reduce income disparities.
Dzikrirullah et al.
also highlight the importance of human capital development as a long-term solution to addressing interregional economic inequality.
Open acces: https://ejournal.
id/index.
php/jeko METHOD This study employs a quantitative approach using secondary data.
The data were obtained from official institutions, namely the Central Bureau of Statistics (Badan Pusat Statistik/BPS) of East Java Province and Central Java Province, as well as BPS of Pacitan Regency and Wonogiri Regency.
Secondary data refer to data that are not collected directly through field observations but are obtained from previously available third-party sources (Sugiyono, 2.
The data used in this study consist of time-series data covering regional economic growth, open unemployment rate, capital expenditure, and income disparity indicators over the period 2010Ae2023.
The population of this study includes all annual socio-economic indicator data related to the research variables in Pacitan Regency and Wonogiri Regency during the observation period.
The sampling technique applied is total sampling, in which all data within the 2010Ae2023 period are used as research samples.
Accordingly, this study comprises 14 years of observations for each region.
The analytical method applied in this study is multiple linear regression.
This method was selected based on the research objective of examining the simultaneous effects of multiple independent variables on a single dependent variable.
A descriptive comparative approach is only able to illustrate differences in income disparity levels across regions but cannot explain causal relationships among variables.
Therefore, multiple linear regression is employed to identify the direction, magnitude, and significance of the effects of regional economic growth, open unemployment rate, and capital expenditure on income disparity in each study area.
The dependent variable in this study is income disparity, measured using the Williamson Index.
The independent variables include regional economic growth, measured by the growth rate of Gross Regional Domestic Product (GRDP) at constant prices.
the open unemployment rate, expressed as the percentage of unemployed individuals relative to the total labor force.
and capital expenditure, measured by the realized capital expenditure of local governments in monetary units .
The research model is specified as follows:
IW = CA CAPE CCTPT CEBM A
where IW represents the Williamson Index as an indicator of income disparity.
EG denotes regional economic growth.
OUR refers to the open unemployment rate.
CE represents capital expenditure.
CA is the constant term.
CAAeCE are regression coefficients, and A is the error term.
Based on economic development theory and previous empirical studies, the hypotheses proposed in this study are as follows:
Jurnal Ekonomi dan Bisnis .
Volume 5 Nomor 1 Page 2 The phenomenon of income disparity can be observed through a comparison between Pacitan Regency and Wonogiri Regency.
Pacitan faces geographical challenges such as hilly terrain and limited accessibility, which contribute to a relatively high poverty rate of 13.
65% in 2023Aiabove both provincial and national averages.
In contrast.
Wonogiri, despite having better infrastructure access and economic potential, continues to experience inequality, as reflected in the increasing Williamson Index over time.
These differences indicate that the impacts of capital expenditure, unemployment, and economic growth on income disparity need to be examined within a specific regional context.
Although numerous studies have investigated the determinants of interregional income disparity in Indonesia, most have been conducted partially, either focusing on a single region or examining only one key factor.
Moreover, studies that directly compare two regions with contrasting geographical and socio-economic characteristics over a relatively long period remain limited.
Consequently, a research gap exists regarding how economic growth, open unemployment rates, and capital expenditure affect income disparity when analyzed comparatively across regions.
This study seeks to fill this gap by comparing Pacitan Regency and Wonogiri Regency over the 2010Ae2023 From a theoretical perspective, regional economic growth is expected to reduce income disparity if such growth is inclusive and evenly distributed, forming the basis of the first hypothesis.
The open unemployment rate is expected to increase income disparity due to limited employment opportunities that widen income distribution gaps, forming the second hypothesis.
Meanwhile, regional government capital expenditure is expected to influence income disparity depending on its allocation pattern and distribution equity, forming the third hypothesis.
Based on these considerations, this study aims to analyze the effects of economic growth, open unemployment rates, and capital expenditure on income disparity in Pacitan Regency and Wonogiri Regency.
H1: Regional economic growth affects income disparity.
H2: The open unemployment rate affects income disparity.
H3: Capital expenditure affects income disparity.
The collected data were analyzed using multiple linear regression with the assistance of IBM SPSS software version 25.
RESULTS & DISCUSSION
Classical Assumption Tests Normality Test Table 1.
One-Sample KolmogorovAeSmirnov Normality Test (Pacitan Regenc.
Unstandardized Residual Normal Parametersa,b Mean Std.
Deviation Absolute Positive Negative Most Extreme Differences Test Statistic Asymp.
Sig.
-taile.
Source: Processed data, 2025 Based on the results presented in Table 1, the Asymp.
Sig.
-taile.
value is 0.
200, which is greater than the significance level of 0.
This indicates that the residuals are normally distributed.
Therefore, the variables of economic growth, open unemployment rate, and capital expenditure are suitable for further analysis in examining income disparity in Pacitan Regency.
Table 2.
One-Sample KolmogorovAeSmirnov Normality Test (Wonogiri Regenc.
Unstandardized Residual Normal Parametersa,b Mean Std.
Deviation Absolute Positive Negative Most Extreme Differences Test Statistic Asymp.
Sig.
-taile.
Source: Processed data, 2025 As shown in Table 2, the Asymp.
Sig.
-taile.
value is 0.
182, which exceeds the 0.
significance level.
This result confirms that the data are normally distributed, indicating that the variables of economic growth, open unemployment rate, and capital expenditure are appropriate for further analysis in Wonogiri Regency Multicollinearity Test Table 3.
Multicollinearity Test Results (Pacitan Regenc.
Standardized Collinearity Statistics Coefficients Model Std.
Error (Constan.
Beta Jurnal Ekonomi dan Bisnis .
Volume 5 Nomor 1 Sig.
Tolerance VIF
Page 3
Unstandardized Coefficients PE
TPT
1,74E-07
Source: Processed data, 2025 The results of the multicollinearity test in Table 3 indicate that all independent variablesAi economic growth, open unemployment rate, and capital expenditureAihave tolerance values greater 10 and Variance Inflation Factor (VIF) values below 10.
These results suggest that no multicollinearity problem exists among the independent variables in the regression model for Pacitan Regency.
Table 4.
Multicollinearity Test Results (Wonogiri Regenc.
Unstandardized Standardized Collinearity Statistics Coefficients Coefficients Std.
Beta Sig.
Tolerance VIF Error Model (Constan.
TPT
1,33E-08
Source: Processed data, 2025 Similarly, the multicollinearity test results in Table 4 show that the tolerance values for all independent variables exceed 0.
10 and the VIF values are less than 10.
Thus, it can be concluded that the regression model for Wonogiri Regency is free from multicollinearity issues.
Heteroskedasticity Test Table 5.
Glejser Heteroskedasticity Test Results (Pacitan Regenc.
Unstandardized Coefficients Model Std.
Error (Constan.
TPT
2,29E-08
Standardized Coefficients Beta Sig.
Source: Processed data, 2025 Based on the Glejser test results in Table 5, the significance values for economic growth .
, open unemployment rate .
, and capital expenditure .
are all greater than 0.
These findings indicate the absence of heteroskedasticity in the regression model.
Therefore, the regression model for Pacitan Regency satisfies the homoskedasticity assumption and is appropriate for further analysis.
Table 6.
Glejser Heteroskedasticity Test Results (Wonogiri Regenc.
Model Std.
Error (Constan.
TPT
2,68E-08
Standardized Coefficients Sig.
Source: Processed data, 2025 Jurnal Ekonomi dan Bisnis .
Volume 5 Nomor 1 Beta Page 4 Unstandardized Coefficients The Glejser test results for Wonogiri Regency presented in Table 6 show that the significance values for economic growth .
, open unemployment rate .
, and capital expenditure .
are all greater than 0.
This confirms that the regression model does not exhibit heteroskedasticity and meets the homoskedasticity assumption.
Autocorrelation Test Table 7.
Run Test Results (Pacitan Regenc.
Unstandardized Residual Test Valuea Cases < Test Value Cases >= Test Value Total Cases Number of Runs Asymp.
Sig.
-taile.
Source: Processed data, 2025 The Run Test results in Table 7 indicate that the Asymp.
Sig.
-taile.
value is 0.
404, which is greater than 0.
This result suggests that the residuals are randomly distributed, indicating the absence of autocorrelation in the regression model for Pacitan Regency.
Table 8.
Run Test Results (Wonogiri Regenc.
Test Valuea Unstandardized Residual Cases < Test Value Cases >= Test Value Total Cases Number of Runs Asymp.
Sig.
-taile.
Source: Processed data, 2025 Similarly, the Run Test results in Table 8 show an Asymp.
Sig.
-taile.
value of 0.
which exceeds the 0.
05 threshold.
This finding confirms that the regression model for Wonogiri Regency is free from autocorrelation problems.
From a theoretical perspective, regional economic growth is expected to have a negative relationship with income disparity if such growth is inclusive and evenly distributed.
The open unemployment rate is expected to have a positive relationship with income disparity, as higher unemployment levels tend to widen income distribution gaps.
Meanwhile, local government capital expenditure is expected to have a negative relationship with income disparity when allocated evenly.
however, it may exert a positive effect if concentrated in specific areas.
Multiple Linear Regression Analysis .
-tes.
(Constan.
TPT Jurnal Ekonomi dan Bisnis .
Volume 5 Nomor 1 Page 5 Model Table 9.
Multiple Linear Regression Results (Pacitan Regenc.
Unstandardized Standardized Collinearity Statistics Coefficients Coefficients Std.
Beta Sig.
Tolerance VIF
Error
1,74E-07
Source: Processed data, 2025 The multiple linear regression analysis for Pacitan Regency produces the following regression equation IW = 0.
309 Oe 0.
003EG 0.
003OUR 1.
742EOe10CE.
The constant value of 0.
309 indicates that income disparity would increase by 0.
309% if all independent variables were held constant.
Economic growth has a negative coefficient of Oe0.
003, implying that a 1% increase in economic growth tends to reduce income disparity by 0.
Conversely, the open unemployment rate has a positive coefficient of 0.
003, indicating that a 1% increase in unemployment leads to a 0.
increase in income disparity.
Capital expenditure also shows a positive effect, with a coefficient of 742EOe10, suggesting that a 1% increase in capital expenditure slightly increases income disparity.
Table 10.
Multiple Linear Regression Results (Wonogiri Regenc.
Unstandardized Standardized Collinearity Statistics Coefficients Coefficients Std.
Beta Sig.
Tolerance VIF Error Model (Constan.
TPT
1,33E-08
Source: Processed data, 2025 For Wonogiri Regency, the estimated regression equation is as follows IW = 0.
407 Oe 0.
Oe 0.
015OUR 1.
325EOe11CE.
The constant value of 0.
407 indicates that income disparity would increase by 0.
407% if all independent variables were constant.
Economic growth has a negative coefficient of Oe0.
006, suggesting that a 1% increase in economic growth reduces income disparity by The open unemployment rate also exhibits a negative coefficient of Oe0.
015, indicating that a 1% increase in unemployment reduces income disparity by 0.
Capital expenditure has a positive but relatively small coefficient of 1.
325EOe11, indicating a negligible impact on income disparity.
Coefficient of Determination (RA) Model Source: Processed data, 2025 Table 11.
Coefficient of Determination (RA) Ae Pacitan Regency Adjusted R Std.
Error of the Estimate Square R Square Durbin-Watson The RA value for Pacitan Regency is 0.
501, indicating that 50.
1% of the variation in income disparity can be explained by economic growth, open unemployment rate, and capital expenditure.
The remaining 49.
9% is influenced by other variables not included in this study.
Model Source: Processed data, 2025 Table 12.
Coefficient of Determination (RA) Ae Wonogiri Regency Adjusted R Std.
Error of the Estimate Square R Square Durbin-Watson Effect of Economic Growth on Income Disparity in Pacitan Regency Based on the regression results, the economic growth variable has a probability value of 242, which exceeds the 0.
05 significance level.
Therefore, the null hypothesis (HCA) is accepted and the alternative hypothesis (HCA) is rejected, indicating that economic growth does not have a significant Jurnal Ekonomi dan Bisnis .
Volume 5 Nomor 1 Page 6 For Wonogiri Regency, the RA value is 0.
748, meaning that 74.
8% of the variation in income disparity is explained by the three independent variables, while the remaining 25.
2% is attributable to factors outside the research model.
effect on income disparity in Pacitan Regency.
This insignificant effect can be attributed to several structural factors, including limited infrastructure, geographically remote conditions, and a predominantly hilly terrain that slows the flow of goods and services and causes economic growth to be spatially concentrated.
In addition, limited employment opportunities, high labor migration, low levels of investment, and weak technology adoption prevent the benefits of economic growth from being evenly distributed across society.
Consequently, the existing economic growth is not strong enough to significantly reduce income disparity.
This finding is consistent with previous studies by Rosalitta & Muljaningsih .
in East Java Province and Hartanti & Taufiq .
at the national level, which conclude that economic growth does not significantly affect income disparity.
Effect of Economic Growth on Income Disparity in Wonogiri Regency The regression analysis shows that economic growth has a probability value of 0.
006, which is lower than the 0.
05 significance level.
Thus, the alternative hypothesis (HCA) is accepted and the null hypothesis (HCA) is rejected, indicating that economic growth has a significant negative effect on income disparity in Wonogiri Regency.
This finding supports the hypothesis that economic growth can significantly influence income inequality.
Statistically, economic growth in Wonogiri Regency during the 2010Ae2023 period demonstrates positive stability, where increases in GRDP, household consumption, and both domestic and foreign investment play an important role in reducing income The entry of various industries and real estate sectors has stimulated regional economic activity, thereby contributing to a more even distribution of welfare.
This result is in line with the findings of Kunenengan et al.
dan Novia .
, which indicate that economic growth negatively affects income disparity.
Effect of Open Unemployment Rate on Income Disparity in Pacitan Regency Based on the regression results, the open unemployment rate has a probability value of 0.
which is greater than the 0.
05 significance level.
Therefore, the null hypothesis (HCA) is accepted and the alternative hypothesis (HCA) is rejected, indicating that the open unemployment rate does not significantly affect income disparity in Pacitan Regency.
This finding does not support the initial hypothesis that unemployment has a significant effect on income disparity.
The insignificant relationship can be explained by the relative stability of the unemployment rate during the 2010Ae2019 period, followed by only minor fluctuations after 2020.
These limited changes were insufficient to significantly influence income distribution.
In addition, local government programs such as Padat Karya Tunai have helped mitigate the impact of unemployment on inequality, although their implementation has not been optimal.
This result is consistent with previous studies by Feraliani et al.
serta Firdianisa & Asmara .
, which find that the open unemployment rate does not significantly affect income disparity.
Effect of Capital Expenditure on Income Disparity in Pacitan Regency Based on the regression results, capital expenditure has a probability value of 0.
014, which is lower than the 0.
05 significance level.
Therefore, the alternative hypothesis (HCA) is accepted and the null hypothesis (HCA) is rejected, indicating that capital expenditure has a positive effect on income disparity in Pacitan Regency.
This finding supports the hypothesis that capital expenditure influences income inequality.
Statistically, the increase in capital expenditure in Pacitan Regency during the Jurnal Ekonomi dan Bisnis .
Volume 5 Nomor 1 Page 7 Effect of Open Unemployment Rate on Income Disparity in Wonogiri Regency The regression results indicate that the open unemployment rate has a probability value of 020, which is below the 0.
05 significance level.
Thus, the alternative hypothesis (HCA) is accepted and the null hypothesis (HCA) is rejected, meaning that the open unemployment rate has a significant effect on income disparity in Wonogiri Regency.
This finding supports the hypothesis that unemployment negatively affects income inequality.
Statistically, the declining trend of the open unemployment rate in Wonogiri Regency during the 2010Ae2023 period reflects the success of local government policies in expanding employment opportunities, as outlined in regional development missions aimed at enhancing community economic potential and reducing unemployment.
As more individuals become employed, income sources are more widely distributed across society, which in turn reduces income This result is consistent with the findings of Ersad et al.
dan Gustini & Sentosa .
, who report that the open unemployment rate has a negative and significant effect on income 2010Ae2023 period is accompanied by a rise in income disparity, suggesting that capital expenditure allocation tends to be concentrated and uneven.
This condition is closely related to development policies that have not proportionally reached all regions or social groups.
Consequently, higher capital expenditure has instead widened interregional income gaps.
This finding aligns with studies by Yasni & Yulianto .
and Sutiono & Syafitri .
, which conclude that capital expenditure positively affects income disparity.
Effect of Capital Expenditure on Income Disparity in Wonogiri Regency The regression results show that capital expenditure has a probability value of 0.
682, which exceeds the 0.
05 significance level.
Thus, the null hypothesis (HCA) is accepted and the alternative hypothesis (HCA) is rejected, indicating that capital expenditure does not have a significant effect on income disparity in Wonogiri Regency.
This finding contradicts the initial hypothesis that capital expenditure affects income disparity.
Statistically, the insignificance of capital expenditure can be explained by its allocation pattern, which is largely focused on long-term infrastructure development and public service provision.
During the 2010Ae2023 period, increased capital expenditure was primarily directed toward supporting the implementation of the Regional Medium-Term Development Plan (RPJMD), particularly in the health sector and the improvement of science- and technologybased public services.
Although these investments aim to enhance overall welfare, their effects on reducing income disparity are not immediately observable due to their long-term nature.
The redistributive impact is expected to become more evident as connectivity and accessibility improve over time.
This result is consistent with previous studies by Putri .
and Pranata & Idris .
, which find that capital expenditure does not significantly affect income inequality.
Page 8
CONCLUSION
Based on the findings of this study on the effects of economic growth, open unemployment rate, and capital expenditure on income disparity in Pacitan Regency and Wonogiri Regency, it can be concluded that each variable exerts different impacts depending on regional characteristics.
Economic growth in Pacitan Regency does not significantly affect income disparity, which can be attributed to limited job creation, low investment levels, and inadequate infrastructure.
In contrast, economic growth in Wonogiri Regency has a significant negative effect on income disparity, indicating that stable and high-quality growth contributes to reducing income inequality.
The open unemployment rate in Pacitan Regency does not influence income disparity, whereas in Wonogiri Regency it has a significant negative effect, demonstrating that effective job creation plays a crucial role in achieving a more equitable income distribution.
Furthermore, capital expenditure in Pacitan Regency has a positive and significant effect on income disparity due to its uneven allocation, which tends to benefit only certain areas.
Conversely, capital expenditure in Wonogiri Regency does not significantly affect income disparity, as it is primarily directed toward long-term development whose impacts have not yet been directly observed.
This study has several limitations.
First, it relies on secondary data obtained from publications of the Central Bureau of Statistics (BPS), which, although reliable, are limited in their ability to capture detailed micro-level conditions.
Second, the analysis is confined to two regencies, which restricts the generalizability of the findings to other regions in Indonesia.
Therefore, future studies are encouraged to incorporate additional relevant variables and expand the geographical scope of analysis to obtain a more comprehensive understanding of the determinants of interregional income disparity.
Based on the research findings, the local government of Pacitan Regency is advised to improve the effectiveness of capital expenditure allocation by prioritizing balanced regional development, particularly in basic infrastructure and productive employment creation.
Development policies in Pacitan should also focus on increasing investment and strengthening regional leading sectors to ensure that economic growth is more evenly distributed.
Meanwhile, the local government of Wonogiri Regency is encouraged to maintain inclusive economic growth by strengthening laborintensive sectors and improving the quality of human resources.
Continuous efforts to control open unemployment should remain a key instrument in reducing income disparity, while ensuring that capital expenditure is consistently directed toward sectors that support long-term and equitable welfare Jurnal Ekonomi dan Bisnis .
Volume 5 Nomor 1 Jurnal Ekonomi dan Bisnis .
Volume 5 Nomor 1
Page 9
REFERENCES