THE CAUSAL RELATIONSHIP BETWEEN EDUCATION LEVEL, INCOME, UNEMPLOYMENT, AND POVERTY IN THE DISTRICT OF SUMENEP PERIOD 2003-2012

Abstract

This study aims to examine the causal relationship between the variables education level, income, unemployment, and poverty in the District of Sumenep. Data that isused in this study is a time series data from the period 2003-2012. Methods used to view the data stationary using Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) method and testing the causal relationship between variables using Granger Causality Test. Based on the results of the data analysis it can be concluded that relationship between education level and poverty are not mutually independence or influence; the relationship between poverty and unemployment is not independence or influence each other; the relationship between unemployment and income is interdependence or mutual influence; the relationship between income and education level is interdependence or mutual influence; the relationship between education level and unemployment are not mutually independence or influence; the relationship between income and poverty is interdependence or mutual influence. Furthermore, there is a very interesting findings about the relationship interdependence is negative between education level and income, especially higher education level and income. This requires further study.