The optimal role of sharia economics in alleviating social inequality in jabodetabek (survey analysis and structural model approach)

Hadi, Kuncoro and Nuraini (2025) The optimal role of sharia economics in alleviating social inequality in jabodetabek (survey analysis and structural model approach). In: Proceedings of the 8th International Conference on Strategic and Global Studies (ICSGS 2024). Atlantis Highlights in Social Sciences, Education and Humanities . Atlantis Press, pp. 626-650. ISBN 978-94-6463-646-8

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Abstract

This study aims to analyze the role of Islamic economics in reducing social inequality in Jabodetabek using a structural model approach. Social inequality in the region as measured by the Gini Index shows a significant level of inequality, triggering serious challenges for social justice. Islamic economic principles such as zakat, the prohibition of usury, and Islamic microfinance are considered to have great potential in addressing such inequality. This study uses a quantitative survey method with 1031 respondents from Jabodetabek, and analyzes the relationship between people's understanding, perceptions, and expectations of the role of Islamic economics with a structural equation model (SEM-PLS). The results show that people's understanding and positive perceptions contribute significantly to high expectations of the role of Islamic economics in reducing social inequality, especially through zakat (29.3%) and Islamic microfinance (34.4%). This research provides practical and theoretical contributions by recommending strengthening Islamic financial literacy and optimizing zakat distribution as key strategies to improve social inequality in urban areas. Policy implications and further development recommendations are also presented to support a more effective implementation of Islamic economics.

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