The Mediating Role of Human Capital on the Effect of Social Assistance and Zakah on Poverty Reduction in Aceh Province, Indonesia

This study analyzes the effect of social assistance programs and Zakah on poverty reduction, with human capital as a mediating variable. The study is motivated by the critical need for poverty alleviation strategies that move beyond direct aid to those that enhance individual capacity through human capital development. Primary data were collected in 2024 from 152 purposively selected poor households in Aceh Province who receive both Social Assistance and Zakah. A Structural Equation Modeling (SEM) approach was employed to test the causal relationships between the variables. The findings indicate that while social assistance has no direct significant impact on poverty reduction, it exerts a positive indirect effect by strengthening human capital. Conversely, Zakah was found to have a direct effect on reducing poverty. Human capital itself demonstrates a strong, negative, and statistically significant relationship with poverty. However, the specific indirect mediating effect of human capital in the relationship between the aid programs and poverty was not significant. These results suggest that social interventions explicitly designed to enhance human capital may be more effective for sustainable poverty alleviation. The study implies that policymakers should reformulate social and economic policies to create more targeted programs that build human capital, thereby fostering a more sustainable impact on poverty reduction.