Growth, Unemployment and Its Implication on Poverty: Empirical Study in Districts/Cities of South Sumatera Province

This paper aims to study the relationship between growth, unemployment and poverty in districts/cities of South Sumatera Provinces. The research applies to Okun's law and trickledown effect theory to explain the relationship between growth and unemployment with its implication in poverty. This theoretical model can be applied to empirical studies to examine if development activities undertaken in a region have been successful in impacting employment and reducing the number of the poor. Therefore, we used fixed effect model estimation of six variables, namely, economic growth, unemployment, poverty, government expenditure, investment, and population of 15 districts/cities in South Sumatera Province in period 2010-2017. Research findings have shown that the relationship between economic growth and unemployment support the Okun's law. The same applies to the relationship between economic growth and poverty when there trickle-down effect was happened in the analysis period.