The Impact of Unemployment, Human Development Index, and Internet Penetration on Income Inequality: Evidence from the Sulawesi Region, Indonesia

This study examines the impact of unemployment, the Human Development Index (HDI), and internet penetration on income inequality in six provinces of the Sulawesi region during 2019–2023. Inclusive development remains a major pillar of Indonesia’s strategy to achieve the Sustainable Development Goals (SDGs) by 2030. However, income inequality continues to pose serious challenges, particularly in Sulawesi, where several provinces record some of the highest Gini ratios in the country. Using panel data regression with a Fixed Effects Model, this research finds that unemployment and HDI have negative but statistically insignificant effects on income inequality, while internet penetration significantly reduces inequality. When considered jointly, the three variables have a significant influence on income inequality in the Sulawesi region. The findings underscore the essential role of digital inclusion, improved human development, and effective labor market policies in promoting balanced and inclusive regional economic growth in Indonesia.