Important role of Zakat, Infaq, and Shadaqoh (ZIS) in dynamic of economic and social: Simultaneous analysis in Indonesia
Abstract
Distribution and realization of Zakat, Infaq, and Shadaqoh (ZIS) have experienced an increase during the year 2000 to 2022.
This study has investigated the relationship between Zakat, Infaq, and Shadaqoh (ZIS) to economic, income inequality and absorbing labour in Indonesia. The authors utilize the simultaneous equation method as well as data used in this study is the secondary data.
This study uses Two-Stage Least Square (2SLS) regression analysis to address endogenous problems and simultaneous bias to analyse variables complex such as ZIS, economic and social indicators.
The results of the study show several important findings. First, ZIS provides a positive contribution to the Gross domestic product (GDP), which implies that increasing ZIS reception can encourage economic growth. Second, ZIS contributes positively to absorbing employment, it shows the distribution of ZIS effectively can support reducing unemployment. However, the third finding identified that the impact of ZIS has insignificance on income inequality. It implies that managing ZIS needs to fix the strategy of ZIS distribution to be more even.
This finding has an implication that needs a strategy of ZIS distribution on the right targeted, economic empowerment program, as well as close collaboration among BAZNAS, the Government, and private sectors to maximalise the impact of ZIS.
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