Analysis of the Causal Relationship between Unemployment and Poverty
DOI:
https://doi.org/10.56403/nejesh.v4i4.356Keywords:
Poverty, Unemployment, Causality, Economic Development, Literature ReviewAbstract
This study aims to analyze the causal relationship between unemployment and poverty by reviewing previous research findings in both developing and developed countries. The method employed is a literature review using the SPIDER approach (Sample, Phenomenon of Interest, Design, Evaluation, Research Type). The reviewed sample focuses on the working-age population, the phenomenon of interest concerns the causal link between unemployment and poverty, the research design includes quantitative studies based on panel data, time series analyses, and causality tests, as well as relevant qualitative studies. The evaluation emphasizes the direction of the relationship and moderating factors, while the selected research type consists of empirical articles published between 2020 and 2025. Literature searches were conducted through Google Scholar, PubMed, and ScienceDirect using the keywords poverty, unemployment, causality, nexus, kemiskinan, and pengangguran, resulting in 20 articles that met the inclusion criteria. The findings indicate that most studies reveal a one-way causal relationship from unemployment to poverty, while others identify a bidirectional relationship, in which poverty also increases the risk of unemployment through limited access to education, skills, and social capital. Furthermore, job quality and social protection policies play a crucial role as moderating variables that may either weaken or strengthen the relationship between the two.
References
Abdullah, H., & Morley, B. (2019). Causal relationship between growth, unemployment, and poverty in Southeast Asia. Asian Economic Journal, 33(2), 123–145. https://doi.org/10.1111/asej.12168
Ajakaiye, O., & Olofin, S. (2023). Unemployment and poverty dynamics in Sub-Saharan Africa: Evidence from panel quantile ARDL. Journal of Economic Studies, 50(2), 345–362. https://doi.org/10.1108/JES-05-2022-0256
Anyanwu, J. C., & Erhijakpor, A. E. O. (2022). Decent work, unemployment, and poverty in Sub-Saharan Africa. African Development Review, 34(3), 281–298. https://doi.org/10.1111/1467-8268.12608
Anyanwu, J. C., & Erhijakpor, A. E. O. (2022). Decent work, unemployment, and poverty in Sub-Saharan Africa. African Development Review, 34(3), 281–298. https://doi.org/10.1111/1467-8268.12608
Badan Pusat Statistik. (2025). Persentase penduduk miskin Maret 2025 turun menjadi 8,47 persen. Jakarta: BPS. https://www.bps.go.id
Blanchflower, D. G. (2019). Not working: Where have all the good jobs gone? Princeton University Press.
Bolarinwa, S. T., & Simatele, M. (2022). Informality and poverty in Africa: Which comes first? Sustainable Development, 30(5), 1217–1229. https://doi.org/10.1002/sd.2468
Bolarinwa, S. T., & Simatele, M. (2022). Informality and poverty in Africa: Which comes first? Sustainable Development, 31(3), 1581-1592. https://doi.org/10.1002/sd.2468
Booth, A., Sutton, A., & Papaioannou, D. (2016). Systematic approaches to a successful literature review (2nd ed.). London: SAGE Publications.
BPS. (2024). Tingkat pengangguran terbuka (TPT) menurut pendidikan tertinggi yang ditamatkan, Februari 2024. Badan Pusat Statistik. https://www.bps.go.id
Dahliah. (2023). The effect of human capital and unemployment on poverty through economic growth and the moderating role of investment. Jurnal Ekonomi Kuantitatif Terapan, 16(1), 30–42. https://ojs.unud.ac.id/index.php/jekt/article/view/93412
Dietrich, H., Patzina, A., & Witte, N. (2024). The short- and long-term effects of job loss on household income and material well-being in Germany. Journal for Labour Market Research, 58(1), 1–17. https://doi.org/10.1186/s12651-024-00369-8
Dugarova, E. (2020). Social protection and poverty reduction in developing countries. Development Policy Review, 38(5), 564–581. https://doi.org/10.1111/dpr.12489
Dugarova, E. (2020). Social protection and poverty reduction in developing countries. Development Policy Review, 38(5), 564–581. https://doi.org/10.1111/dpr.12489
Dugarova, E. (2020). Social protection and poverty reduction in developing countries. Development Policy Review, 38(S1), O1–O20. https://doi.org/10.1111/dpr.12489
Faisal, M., & Ichsan, I. (2021). The analysis of economic growth, unemployment rate and inflation on poverty levels in Indonesia (using the vector error correction model (VECM) method). Journal of Malikussaleh Public Economics, 3(2), 93–103. https://ojs.unimal.ac.id/jompe/article/view/3210
Fayza, S., Sinambela, R. A., Situmorang, R. M., & Silaban, P. S. M. J. (2024). The Effect of Education and Unemployment on Poverty in Indonesia’s 34 Provinces (2018–2023): The Mediating Role of the Human Development Index. Jurnal Ekonomi Balance.
Fields, G. S. (2019). Working poverty in developing countries. Journal of Development Studies, 55(3), 545–561. https://doi.org/10.1080/00220388.2018.1520219
Fields, G. S. (2019). Working poverty in developing countries. The Journal of Development Studies, 55(5), 918–935. https://doi.org/10.1080/00220388.2018.1520219
Firdauzi, I., & Dewi, N. M. R. K. (2022). Analysis of causality interactions between education, inequality, and unemployment toward poverty in East Java: Empirical evidence from dynamic panel co-integration model. Journal of Economics Research and Social Sciences, 6(1), 64-75. https://doi.org/10.18196/jerss.v6i1.13568
Firdauzi, I., & Dewi, N. M. R. K. (2022). Analysis of causality interactions between education, inequality, and unemployment toward poverty in East Java: Empirical evidence from dynamic panel co-integration model. Journal of Economics Research and Social Sciences, 6(1), 64–75. https://journal.umy.ac.id/index.php/jerss/article/view/13568
Firdauzi, I., & Dewi, N. M. R. K. (2022). Analysis of causality interactions between education, inequality, and unemployment toward poverty in East Java: Empirical evidence from dynamic panel co-integration model. Journal of Economics Research and Social Sciences, 6(1), 64–75. https://journal.umy.ac.id/index.php/jerss/article/view/13568
Firdauzi, M. I., & Dewi, V. I. (2022). Analysis of causality interactions between education, inequality, and unemployment toward poverty in East Java. Journal of Economics Research and Social Sciences, 6(1), 73–90.
Haidir, A. A., & Setyari, N. P. W. (2024). Indonesia Social Progress: The Role of Access to Basic Education in Escaping from Poverty Trap. Jurnal Ekonomi & Studi Pembangunan, 24(2), 428-457.
Haseeb, M., Xia, E., Baloch, M. A., & Abbas, K. (2019). The dynamics of unemployment, poverty, and growth in Pakistan: New evidence from ARDL and Granger causality approach. Economic Change and Restructuring, 52(1), 45–66. https://doi.org/10.1007/s10644-017-9225-2
Haseeb, M., Xia, E., Baloch, M. A., & Abbas, K. (2019). The dynamics of unemployment, poverty, and growth in Pakistan: New evidence from ARDL and Granger causality approach. Economic Change and Restructuring, 52(1), 45–66. https://doi.org/10.1007/s10644-017-9225-2
Haseeb, M., Xia, E., Baloch, M. A., & Abbas, K. (2019). The dynamics of unemployment, poverty, and growth in Pakistan: New evidence from ARDL and Granger causality approach. Economic Change and Restructuring, 52(2), 91–109. https://doi.org/10.1007/s10644-017-9225-2
International Labour Organization. (2024). World employment and social outlook: Trends 2024. Geneva: ILO. https://www.ilo.org/global/research/global-reports/weso
Karo Karo, F., & Yusnida, Y. (2024). Causality Analysis Between Unemployment, Poverty, and Economic Growth in the Southern Sumatra Region. EKOMBIS REVIEW: Jurnal Ilmiah Ekonomi dan Bisnis, 12(1), 1-31. https://doi.org/10.37676/ekombis.v12i1.5062
Karo Karo, F., & Yusnida, Y. (2024). Causality analysis between unemployment, poverty, and economic growth in the Southern Sumatra Region. Ekombis Review: Jurnal Ilmiah Ekonomi dan Bisnis, 12(1), 1–31. https://doi.org/10.37676/ekombis.v12i1.5062
Karo Karo, F. A., & Yusnida, Y. (2024). Causality analysis between unemployment, poverty, and economic growth in the Southern Sumatra Region. Ekombis Review: Jurnal Ilmiah Ekonomi dan Bisnis, 12(1), 1–31. https://doi.org/10.37676/ekombis.v12i1.5062
Karo Karo, R., & Yusnida, E. (2024). Causality analysis between unemployment, poverty, and economic growth in the Southern Sumatra Region. Economic Review, 12(1), 45–57.
Kurniawati, D., & Oktaviani, R. (2021). Pengaruh pengangguran terhadap kemiskinan di Jawa Barat: Analisis data panel. Jurnal Ekonomi Pembangunan Indonesia, 21(2), 77–90.
Mankiw, N. G. (2021). Principles of economics (9th ed.). Cengage Learning.
Marzali, A. (2016). Menulis kajian literatur. ETNOSIA: Jurnal Etnografi Indonesia, 1(2), 112–117. https://doi.org/10.31943/etnosia.v1i2.14
Naz, A. (2023). Linkages between different types of globalization and socio-economic variables: Panel data analysis for 129 countries. Journal of Economic Structures, 12, Article 7. https://doi.org/10.1186/s40008-023-00301-2
Nessa, A., & Imai, K. S. (2023). Trade openness and working poverty: Empirical evidence from developing countries. International Trade, Politics and Development, 7(1), 1–19. https://doi.org/10.1108/ITPD-08-2022-0018
Ngubane, M. Z., Mndebele, S., & Kaseeram, I. (2023). Economic growth, unemployment and poverty: Linear and non-linear evidence from South Africa. Heliyon, 9(10), e20267. https://doi.org/10.1016/j.heliyon.2023.e20267
Pohan, H. L. M., & Vitale, J. D. (2016). Overcoming the Poverty Trap through Education: An Intergenerational Study on Indonesia. Journal of Indonesian Applied Economics, 6(1), 1-19.
Putra, I. K., & Dewi, N. L. (2022). Pengaruh pengangguran terhadap kemiskinan di Indonesia. Jurnal Ekonomi Pembangunan Indonesia, 22(1), 55–67.
Putri, A., & Syahputra, R. (2022). Analysis of the effect of unemployment, economic growth and inflation on poverty in West Sumatra Province. Unes Journal of Social and Development Studies, 2(3), 245–256. https://ujsds.ppj.unp.ac.id/index.php/ujsds/article/view/329
Shaikh, F. M., & Majeed, M. T. (2020). Poverty, inequality, and unemployment in South Asia: A panel data analysis. South Asian Journal of Macroeconomics and Public Finance, 9(1), 97–122. https://doi.org/10.1177/2277978720903106
Shaikh, F. M., & Majeed, M. T. (2020). Unemployment, inequality and poverty: Evidence from South Asia. South Asia Economic Journal, 21(1), 34–55. https://doi.org/10.1177/1391561420909958
Shaikh, F. M., & Majeed, M. T. (2020). Unemployment, inequality and poverty: Evidence from South Asia. South Asia Economic Journal, 21(1), 34–55. https://doi.org/10.1177/1391561420909958
Sitorus, S. A., & Ashar, K. (2025). Analysis of Factors Influencing Poverty in The Special Region of Yogyakarta. Journal of Development Economic and Social Studies.
Snyder, H. (2019). Literature review as a research methodology: An overview and guidelines. Journal of Business Research, 104, 333–339. https://doi.org/10.1016/j.jbusres.2019.07.039
The Jakarta Post. (2025, August 9). Analysis: Poverty, unemployment fall at the cost of rising informality. https://www.thejakartapost.com/opinion/2025/08/09/analysis-poverty-unemployment-fall-at-the-cost-of-rising-informality.html
Todaro, M. P., & Smith, S. C. (2020). Economic development (13th ed.). New York: Pearson.
Todaro, M. P., & Smith, S. C. (2020). Economic development (13th ed.). Pearson.
Wahyudi, M., & Anwar, D. (2021). Kausalitas antara pengangguran dan kemiskinan di Provinsi Sumbagsel: Analisis time series. Economic Review: Jurnal Ekonomi dan Bisnis, 19(2), 115–127. https://jurnal.unived.ac.id/index.php/er/article/view/5062
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Khairuddin
This work is licensed under a Creative Commons Attribution 4.0 International License.
