GOVERNMENT SPENDING ON EDUCATION, HEALTH, AND MINIMUM WAGES AS PREDICTORS OF HUMAN DEVELOPMENT INDEX: STUDY OF SELECTED PROVINCES OF INDONESIA

The study objective was to test the influence of three factors namely government spending on education, health, and minimum wages on human development index in five selected provinces of Indonesia. The method of analysis is the Panel-data based analysis covering the time period of 2007 to 2016. The study is focused towards five selected provinces in Indonesia including Bangka Belitung, Lampung, Bengkulu, South Sumatra, and Jambi. The results show that government spending on education and health bring positive but insignificant effects on human development index; whereas, minimum wages turned out to be positive and significantly influencing human development index. Overall the HDI average is not much different and there is no discrepancy between provinces in Southern Sumatra from the range of 68 percent to 70 percent. However, of the five provinces in Southern Sumatra, there are two provinces with higher HDI figures than the others, namely Jambi Province and Bangka Belitung Province