•  
  •  
 

International Journal of Islamic Economics and Business Sustainability

Abstract

Purpose – This study examines the sectoral linkages and multiplier effects of local government expenditure and private investment in education, health, and information and communication technology (ICT) – sectors central to human capital formation – in the Special Region of Yogyakarta (DIY), Indonesia, and interprets the findings through a Maqasid Sharia lens.

Design/methodology/approach – The 2016 input-output table for DIY (17 sectors) was updated to 2020–2029 using the RAS method. Backward and forward linkages and output, gross value added (GVA), income, and labor multipliers were estimated for all sectors. Four shock simulations (ICT, education, health, and a combined shock) were run for an ex-post period (2020–2025, realized data) and an ex-ante period (2026–2029, optimistic, moderate, and pessimistic scenarios).

Findings – All three sectors are persistent economic-base sectors (location quotient greater than 1, 2020–2025) but occupy different structural positions: ICT alone is generally interlinked with the rest of the economy (Rasmussen–Hirschman Quadrant III), education has the highest income multiplier (0.598), and health ranks second among the three in job creation. In 2025 the combined stimulus generated additional output of IDR8.30 trillion, GVA of IDR5.26 trillion, household income of IDR3.11 trillion, and 39,304 jobs above business-as-usual, with the income effect proportionally the largest.

Implications – Sectoral composition, not stimulus size alone, drives multiplier outcomes; a persistent jobless-growth pattern calls for complementary labor policy alongside continued sectoral spending.

Originality/value – The study integrates an RAS-updated regional input-output model with a Maqasid Sharia interpretive framework, a combination rarely applied at the sub-national level.

References

Aghion, P., & Howitt, P. (2009). The economics of growth. The MIT Press.

Ahmed, H. (2011). Maqasid al-shari'ah and Islamic financial products: A framework for assessment. ISRA International Journal of Islamic Finance, 3(1), 149-160.

Anasa, R., Tamin, O. Z., & Wibowo, S. S. (2015). Applying input-output model to estimate the broader economic benefits of Cipularang Tollroad investment to Bandung District. Procedia Engineering, 125, 489-497.

Aponte, F. R. (2025). Economic interdependencies and sectoral impacts: An input-output analysis of the Norwegian fisheries and aquaculture sector amidst COVID-19. Fisheries Research, 281, Article 107247. https://doi.org/10.1016/j.fishres.2024.107247

Armelly, Rusdi, M., & Pasaribu, E. (2021). Analisis sektor unggulan perekonomian Indonesia: Model input-output. Sorot, 16(2), 119-134. https://doi.org/10.31258/sorot.16.2.119-134

Aswanto, A. (2023). Pengaruh pendidikan dan kesehatan terhadap produk domestik regional bruto (PDRB) Riau 2010-2012. EXERO: Journal of Research in Business and Economics, 6(1), 19-38. https://doi.org/10.24071/exero.v6i1.6685

Atun, R., Fries, J. L., Hernandez-Villafuerte, K., Muller, M., Ostwald, D., & Schmitt, M. (2025). Contribution of investment in health and cancer control to economic growth in commonwealth countries. eClinicalMedicine, 82, 103180. https://doi.org/10.1016/j.eclinm.2025.103180

Badan Pusat Statistik Provinsi D.I. Yogyakarta. (2025). Statistik pembangunan Daerah Istimewa Yogyakarta 2025. BPS Provinsi DIY.

Badan Pusat Statistik. (2026). Hasil Survei Penduduk Antar Sensus (SUPAS) 2025 [Press release]. Badan Pusat Statistik.

Bank Indonesia DIY. (2025). Kajian ekonomi dan keuangan regional Provinsi D.I. Yogyakarta. Bank Indonesia Kantor Perwakilan DIY.

Barba, I., & Iraizoz, B. (2025). The critical role of the health-care sector in promoting employment for women and migrants in the EU: A multicountry input-output analysis. Economic Systems, 49, Article 101249. https://doi.org/10.1016/j.ecosys.2024.101249

Becker, G. S. (1964). Human capital: A theoretical and empirical analysis, with special reference to education. University of Chicago Press.

Bernika, L., & Monika, A. K. (2024). Peran ekonomi kreatif terhadap perekonomian Indonesia selama pandemi dengan analisis tabel input-output. Jurnal Ekonomi Indonesia, 13(3), 249-271.

Balai Penjaminan Mutu Pendidikan DIY. (2025). Data anak tidak sekolah Provinsi D.I. Yogyakarta 2025. Kementerian Pendidikan, Kebudayaan, Riset, dan Teknologi.

Cardona, M., Kretschmer, T., & Strobel, T. (2013). ICT and productivity: Conclusions from the empirical literature. Information Economics and Policy, 25(3), 109-125. https://doi.org/10.1016/j.infoecopol.2012.12.002

Chapra, M. U. (2008). The Islamic vision of development in the light of the maqasid al-shari'ah (Occasional Paper No. 15). The Islamic Research and Teaching Institute.

Dewan Perwakilan Rakyat Daerah DIY. (2026, May 13). Pansus tekankan penanganan kemiskinan, tata kelola pendidikan, dan pokir dalam rekomendasi LKPJ Gubernur 2025. e-Parlemen DPRD DIY.

Domar, E. (1946). Capital expansion, rate of growth, and employment. Econometrica, 14(2), 137-147. https://doi.org/10.2307/1905364

Feriyanto, N. (2019). The effect of the quality of human development factors on the rate of economic growth in Yogyakarta Special Province. International Journal for Quality Research, 13(1), 157-176. https://doi.org/10.24874/IJQR13.01-10

Forichon, K. (2020). Considering human capital in a multi-dimensional analysis of fragility (OECD Development Co-operation Working Paper No. 78). OECD Publishing.

Ghosh, A. (1958). Input-output approach in an allocation system. Economica, 25(97), 58-64. https://doi.org/10.2307/2550694

Government of Indonesia. (2022). Law No. 1 of 2022 on financial relations between the central government and regional governments.

Government of Indonesia. (2023). Law No. 17 of 2023 on health.

Government of Indonesia. (2025). Presidential Regulation No. 12 of 2025 on the National Medium-Term Development Plan (RPJMN) 2025-2029.

Harrod, R. F. (1939). An essay in dynamic theory. The Economic Journal, 49(193), 14-33. https://doi.org/10.2307/2225181

Holy, V., & Safr, K. (2023). Disaggregating input-output tables by the multidimensional RAS method: A case study of the Czech Republic. Economic Systems Research, 35(1), 95-117. https://doi.org/10.1080/09535314.2022.2091978

Ibrahim, I., Winarno, T., Viva, M., & Yanfitri, Y. (2014). The regional impact transmission via international trade: An ASEAN-IO approach. Bulletin of Monetary Economics and Banking, 16(4), 315-344. https://doi.org/10.21098/bemp.v16i4.449

Jorgenson, D. W., & Vu, K. M. (2016). The ICT revolution, world economic growth, and policy issues. Telecommunications Policy, 40(5), 383-397. https://doi.org/10.1016/j.telpol.2016.01.002

Kassem, H. S., Al-Zaidi, A. A., & Baessa, A. (2021). Effectiveness of work-integrated learning partnerships: Case study of cooperative education in agricultural tertiary education. Sustainability, 13(22), 12684. https://doi.org/10.3390/su132212684

Kitamura, N., Abbas, K., & Nathwani, D. (2021). Public health and social measures to mitigate the health and economic impact of the COVID-19 pandemic in Turkey, Egypt, Ukraine, Kazakhstan, and Poland during 2020-2021: Situational analysis [Preprint]. Research Square. https://doi.org/10.21203/rs.3.rs-1127509/v1

Kite, G. (2014). Linked in? Software and information technology services in India's economic development. Journal of South Asian Development, 9(2), 99-119. https://doi.org/10.1177/0973174114536095

Lahiri, K., & Banerjee, S. (2013). India's health-care sector under GATS: Inquiry into backward and forward linkages. Foreign Trade Review, 48(3), 285-357. https://doi.org/10.1177/0015732513496617

Lucas, R. E., Jr. (1988). On the mechanics of economic development. Journal of Monetary Economics, 22(1), 3-42. https://doi.org/10.1016/0304-3932(88)90168-7

Mehta, B. S. (2020). Inter-industry linkages of the ICT sector in India. Indian Journal of Human Development, 14(1), 42-61. https://doi.org/10.1177/0973703020919835

Miller, R. E., & Blair, P. D. (2009). Input-output analysis: Foundations and extensions (2nd ed.). Cambridge University Press.

Miller, R. E., & Blair, P. D. (2015). Input-output analysis: Foundations and extensions (2nd ed.). Cambridge University Press.

Mincer, J. (1974). Schooling, experience, and earnings. Columbia University Press.

Ministry of Finance of the Republic of Indonesia. (2024). Ministerial Regulation No. 24 of 2024 on the allocation and use of mandatory expenditure in regional budgets.

Mohamed, H. (2018). Macro and micro-level indicators of Maqasid al-Shari'ah in socio-economic development policy and its governing framework. Islamic Economic Studies, 25(3), 19-44. https://doi.org/10.12816/0045058

Nanga, M. (2001). Makroekonomi: Teori, masalah, dan kebijakan. Raja Grafindo Persada.

Pavlov, V. V., & Arapova, E. Y. (2020). Human capital development in a long-term governmental planning: OECD case study. Journal of Economic and Social Studies, 44(6). https://doi.org/10.17223/2312461X/44/6

Rahmawan, I. M., & Angraini, W. (2021). Keterkaitan antar sektor dan antar wilayah dalam perekonomian provinsi Lampung: Analisis data tabel inter regional input output (IRIO) tahun 2016. Jurnal Ekonomi dan Statistik Indonesia, 1(3), 227-243.

Rasmussen, P. N. (1958). Studies in intersectoral relations. North-Holland Publishing Company.

Regional Government of DIY. (2026). Laporan keterangan pertanggungjawaban Gubernur Daerah Istimewa Yogyakarta tahun 2025. Pemerintah Daerah Daerah Istimewa Yogyakarta.

Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5, Pt. 2), S71-S102. https://doi.org/10.1086/261725

Schultz, T. W. (1961). Investment in human capital. The American Economic Review, 51(1), 1-17.

Sen, A. (1999). Development as freedom. Oxford University Press.

Sen, A., Fitoussi, J. P., & Stiglitz, J. (2010). Mismeasuring our lives: Why GDP doesn't add up. The New Press.

Solow, R. M. (1956). A contribution to the theory of economic growth. Quarterly Journal of Economics, 70(1), 65-94. https://doi.org/10.2307/1884513

Stone, R. (1961). Input-output and national accounts. OECD.

Suryaatmaja, N. A. A., Jamil, I. R., & Putri, A. S. (2023). Determining leading industries in optimizing downstream potential of North Sumatra Province: An input-output approach. Jurnal Ekonomi Pembangunan, 21(1), 69-84.

Szabo, S. (2015). Updating input-output tables using the RAS method. Regional Statistics, 5(2), 171-183.

Thohira, N. A., et al. (2025). Prevalence and determinants of stunting in the Special Region of Yogyakarta: Analysis of SSGI 2024 data. Faletehan Health Journal, 12(3).

UNDP. (2024). Human development report 2023/24: Breaking the gridlock - Reimagining cooperation in a polarized world. United Nations Development Programme.

World Bank. (2020). The human capital index 2020 update: Human capital in the time of COVID-19. World Bank.

Yaqin, M. A., & Sumarto, M. (2023). Implikasi pengeluaran pemerintah daerah di sektor pendidikan, kesehatan, dan infrastruktur pada pembangunan manusia di Daerah Istimewa Yogyakarta [Undergraduate thesis, Universitas Gadjah Mada]. UGM ETD Repository.

Yasmin, T., El Refae, G. A., & Eletter, S. (2019). Sectoral productivity in Hungarian economy: An input-output linkages approach. Journal of Eastern European and Central Asian Research, 6(2), 344-355.

Download

Share

COinS