Objective - This study describes the economic performances of the Central Java province from 2010 to 2013. In line with that, it analyses the effects of the economic performance, dependency ratio, employment, and fiscal decentralization on the welfare of the people in the region.

Methodology/Technique - This study uses the panel data of between 2010 and 2013. Data were analysed using descriptive analysis and multiple linear regression analysis.

Findings - Descriptive analysis of the Economic Performance Index indicates that the economic performance of regencies/cities in Central Java province has improved.Results of the Multiple Linear Regression analysis indicates that the economic performance, the young dependency ratio, and Regional Own-Source Revenue positively and significantly influences the welfare of the people in the region.

Novelty - It is recommended that local governments reduce the development inequality by directing the regional development towards its main characteristics.Local governments need coherence, consistency, and synchronization between development planning and funding as well as between the Local Government Unit where the accountability of the local government's performance is based on well-defined indicators and mechanisms.

Type of Paper: Empirical

Keywords: Economic Performance; Development gaps; HDI; Dependency Ratio; Employment; Fiscal Decentralization.