ANALYSIS OF THE RELATIONSHIP BETWEEN POVERTY AND UNEMPLOYMENT USING PEARSON CORRELATION

Abstract

Poverty and unemployment are two fundamental socio-economic problems that are often

assumed to be closely related: the higher the unemployment rate in a region, the higher its poverty

rate tends to be. This study aims to analyze the direction and strength of the relationship between

the percentage of the poor population and the Open Unemployment Rate (TPT) at the provincial

level in Indonesia using Pearson correlation analysis. The method used is a quantitative

descriptive approach with secondary data from Statistics Indonesia (BPS), namely the poverty

rate of March 2024 and the unemployment rate of February 2024 for 34 provinces. The results

show a Pearson correlation coefficient of r = -0.33, a coefficient of determination of 11.1 percent,

and a p-value of 0.054, indicating a weak negative relationship that lies at the borderline of the 5

percent significance level. This means that provinces with high poverty rates do not always have

high unemployment rates, and vice versa. This pattern is presumably caused by the dominance

of the informal and agricultural sectors in high-poverty regions, where people tend to remain

employed despite low productivity and income (working poverty), while high unemployment

rates mostly occur in provinces with more formal and competitive economic structures. It can be

concluded that reducing unemployment alone does not automatically reduce poverty, so poverty

alleviation policies also need to focus on improving the productivity and income of informal

workers. Further research is recommended to include additional control variables such as average wages, education level, and the structure of the economic sector.