The influence of islamic bank and zakat on unemployment in urban and rural areas of Indonesia

Mohammad Zen Nasrudin Fajri(1*), Ahmad Suminto(2), Abdul Latif Rizqon(3),


(1) Universitas Darussalam Gontor
(2) Universitas Darussalam Gontor
(3) Universitas Darussalam Gontor
(*) Corresponding Author

Abstract


Unemployment in Indonesia has shown a downward trend in the last decade which is associated with the positive growth of Islamic banks and zakat in Indonesia. This research aims to reveal the impact of Islamic bank performance on unemployment in Indonesia at a national level, in urban and rural areas. It also aims to find out the impact of zakat performance on those groups of unemployment. ARDL method is used to analyze data between 2007 and 2022. The results of the findings show that the zakat collection positively affects national unemployment, urban unemployment, and rural unemployment in Indonesia in the long run. However, in the short run, it only increases urban unemployment. Meanwhile, Islamic bank financing significantly reduces national unemployment and urban unemployment in the short run but it has no impact on rural unemployment. In the long run, Islamic bank financing does not affect all kinds of unemployment.

Keywords: Islamic bank, zakat, unemployment, urban, rural. 


Full Text:

PDF

References


Abisuga-Oyekunle, O. A., Patra, S. K., & Muchie, M. (2020). SMEs in sustainable development: Their role in poverty reduction and employment generation in sub-Saharan Africa. African Journal of Science, Technology, Innovation and Development, 12(4), 405–419. https://doi.org/10.1080/20421338.2019.1656428

Anggraini, R., Ababil, R., & Widiastuti, T. (2018). Pengaruh Penyaluran Dana ZIS dan Tingkat Inflasi terhadap Pertumbuhan Ekonomi Indonesia Periode 2011-2015. FALAH: Jurnal Ekonomi Syariah, 3(2), 2–11.

Athoillah, M. A. (2018). The Zakat Effect on Economic Growth, Unemployment, and Poverty in the Island of Java: Panel Data Analysis 2001-2012. Ekspansi, 10(2), 205–230.

Azolibe, C. B., Dimnwobi, S. K., & Uzochukwu-Obi, C. P. (2022). The determinants of unemployment rate in developing economies: does banking system credit matter? Journal of Economic and Administrative Sciences. https://doi.org/10.1108/jeas-01-2022-0021

Benbekhti, S. E., Boulila, H., & Bouteldja, A. (2021). Islamic Finance, Small and Medium Enterprises and Job Creation in Turkey: An Empirical Evidence (2009-2017). International Journal of Islamic Economics and Finance (IJIEF), 4(SI). https://doi.org/10.18196/ijief.v4i0.10490

Candra, D., Hamdi, B., Herianingrum, S., & Amaliyah, H. (2023). The Effect of Zakat Distribution and the Growth of the Halal Industry on the Human Development Index and Its Impact on Indonesia’s Unemployment Rate. Jurnal Ilmiah Ekonomi Islam, 9(1), 598–608. https://doi.org/10.29040/jiei.v9i1.7928

Chapra, M. U. (2011). The Global Financial Crisis: Can Islamic Finance Help?

Elasrag, H. (2016). Islamic Finance for SMES.

Elfadhli. (2015). Zakat Produktif Sebagai Salah Satu Solusi Pengentasan Kemiskinan dan Pengangguran di Indonesia. JURIS (Jurnal Ilmiah Syariah), 14(1), 99–112.

Engle, R. F., & Granger, C. W. J. (1987). Co-Integration and Error Correction: Representation, Estimation, and Testing. Econometrica, 55(2), 251. https://doi.org/10.2307/1913236

Fajri, M. Z. N., Muhammad, A. A., Umam, K., Putri, L. P., & Ramadhan, M. A. (2022). The Effect Covid-19 and Sectoral Financing on Islamic Bank Profitability in Indonesia. Journal of Islamic Economic Laws, 5(1), 38–60. https://doi.org/10.23917/jisel.v5i1.17181

Febriyantoro, M. T., & Arisandi, D. (2018). Pemanfaatan Digital Marketing Bagi Usaha Mikro, Kecil Dan Menengah Pada Era Masyarakat Ekonomi Asean. JMD: Jurnal Riset Manajemen & Bisnis Dewantara, 1(2), 61–76. https://doi.org/10.26533/jmd.v1i2.175

Folawewo, A. O., & Adeboje, O. M. (2017). Macroeconomic Determinants of Unemployment: Empirical Evidence from Economic Community of West African States. African Development Review, 29(2), 197–210. https://doi.org/10.1111/1467-8268.12250

Halicioglu, F. (2007). The Financial Development and Economic Growth Nexus for Turkey. EERI Research Paper Series, 6. www.eeri.eu

Kassim, S. (2016). Islamic finance and economic growth: The Malaysian experience. Global Finance Journal, 30, 66–76. https://doi.org/10.1016/j.gfj.2015.11.007

Khairina, N. N., Syarief, M. E., & Setiawan. (2020). Peran Perbankan Syariah Dalam Penyerapan Tenaga Kerja Pada Sektor Riil. Human Falah: Jurnal Ekonomi Dan Bisnis Islam, 7(1), 117–137.

Ma, Y., & Jalil, A. (2008). Financial development and economic growth: Time series evidence from Pakistan and China. In Journal of Economic Cooperation (Vol. 29). https://www.researchgate.net/publication/252780010

Magdalena, S., & Suhatman, R. (2020). The Effect of Government Expenditures, Domestic Invesment, Foreign Invesment to the Economic Growth of Primary Sector in Central Kalimantan. Budapest International Research and Critics Institute (BIRCI-Journal): Humanities and Social Sciences, 3(3), 1692–1703. https://doi.org/10.33258/birci.v3i3.1101

Mifrahi, M. N., & Darmawan, A. S. (2022). Analisis tingkat pengangguran terbuka di Indonesia periode sebelum dan saat pandemi covid-19. Jurnal Kebijakan Ekonomi Dan Keuangan, 111–118. https://doi.org/10.20885/JKEK.vol1.iss1.art11

Mohammad Zen Nasrudin Fajri, Rofiqo, A., Rizqon, A. L., & ` R. H. (2023). The Impact of MSMEs Financing in Islamic Bank on Unemployment in Indonesia. Jurnal Ekonomi Syariah Teori Dan Terapan, 10(5), 443–454. https://doi.org/10.20473/vol10iss20235pp443-454

Mumani, H. F. (2014). Islamic Finance for SMEs in Jordan 1978-2014. Eastern Mediterranenan University.

Oktafianto, E. K., Achsani, N. A., & Irawan, T. (2019). The Determinant of Regional Unemployment in Indonesia: The Spatial Durbin Models. Signifikan: Jurnal Ilmu Ekonomi, 8(2). https://doi.org/10.15408/sjie.v8i2.10124

Purwatiningsih, A. P., & Yahya, M. (2020). Why Zakat Collection in Indonesia is Not As Effective As It is in Malaysia. JURNAL PENELITIAN, 14(1), 1. https://doi.org/10.21043/jp.v14i1.7128

Salh, S. A. (2018). Role of The Islamic Banks in Reducing the Unemployment. Proceedings Book of The Third International Legal Issues Conference. https://doi.org/10.23918/ilic2018.47

Shabbir, G., Anwar, S., Hussain, Z., & Imran, M. (2011). Contribution of Financial Sector Development in Reducing Unemployment in Pakistan. International Journal of Economics and Finance, 4(1). https://doi.org/10.5539/ijef.v4n1p260

Singh, R. (2018). The Cause of Unemployment in Current Market Scenario. Vivechan International Journal of Research , 9(1), 81–86.

Syafi Antonio, M., Mahbubi Ali, M., & Firdaus, J. (2021). The Role of Zakat in Overcoming Inflation and Unemployment: Revisiting The Trade-Off Theory. ICR Journal, 12(1), 73–97.

Yuli, S. B. C., & Rofik, M. (2023). Implications of Sharia-compliant financing trade-offs on unemployment and growth. Public and Municipal Finance, 12(1), 100–109. https://doi.org/10.21511/pmf.12(1).2023.09

Zahra, T. P., & Auwalin, I. (2020). PENGARUH ZAKAT INFAK SEDEKAH (ZIS) TERHADAP PENGANGGURAN DI INDONESIA: METODE AUTOREGRESSIVE DISTRIBUTED LAG (ARDL). Jurnal Ekonomi Syariah Teori Dan Terapan, 7(2), 372. https://doi.org/10.20473/vol7iss20202pp372-388




DOI: 10.24235/jm.v9i1.17108

Article Metrics

Abstract view : 0 times
PDF - 0 times

Refbacks

  • There are currently no refbacks.


Al Mustashfa Indexed by:


Reference Management Tool


Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

View My Stats