Abstract:

Welfare among population in country are important for achieve sustainable economic growth. Fundamental theory from welfare economics are efficiency and equality. Welfare economics described by allocation of resources are equal and how the distribution of resources affects economic condition as a whole. Redistribution of income and wealth in economy enables the resources more accessible and furthermore preserve the income sustainability. Waqf effectively as tools for income redistribution because of large potential among Muslim majority in Indonesia. This research conduct simulation of waqf in financing small and micro industry in Indonesia. Sample used in this paper are obtained from Small and Micro Industry Survey 2014 (VIMK 2014). Method for this study used OLS regression to analyse association between capital and profit, while used arithmetic from coefficient OLS regression for microsimulation. The results of the study show that increased capital as increased factor of production can increases the profit. Furthermore, welfare among society increases because of increases income in small and micro industries.