Assessing the efficiency of the education and health budget in poverty alleviation: evidence from Indonesia

This study examines the effectiveness of education and health budget utilisation in reducing poverty in Indonesia. Despite the government's efforts to improve welfare, the poverty rate remains high. The methodology includes panel data regression analysis to assess the impact of education and health expenditure on poverty reduction. Using data from the Ministry of Finance and the Central Bureau of Statistics from 2011 to 2022, the results show that education expenditure and school enrolment significantly impact poverty reduction in most regions. However, in the eastern region, school enrolment has been shown to significantly reduce poverty. The study concludes that increasing educational resources and enrolment can reduce poverty, especially in disadvantaged areas. Policy recommendations include increasing educational budget allocations and implementing inclusive education programs. This paper contributes to development economics and public policy by providing empirical evidence for targeted and efficient budget allocations for poverty alleviation efforts.