policy measures to government, policy makers and, income is distributed unevenly among a population. Compared to the effects that income inequality has on men, the effects of income inequality on women have been relatively neglected. evident in developing countries like Nigeria. High levels of income inequality are linked to economic instability, financial crisis, debt and inflation. N- Inequality divides society and reduces social cohesion and non-material welfare. The statistical sample was 86 winner countries in these games. increase the level of poverty and inequality. Available at: https://www.intelligenteconomist.com/lorenz-curve-. and the effect of redistribution. Cross sectional, multiple regression analysis. Two institutional Finally, from the empirical findings in this research work and based on the relationship each determinant exhibited with the Gini coefficient of income distribution in Nigerian economy, a set of policy ecommendations were made such as: government ensuring the formulation and implementation of more pragmatic employment policies in Nigeria, government ensuring proper monitoring of its spending on education and health through appropriate policy measures and policies that bring about more equitable distribution of income and associated income earning opportunities were suggested among others. Some studies have found a positive relationship, others a negative relationship while some found no correlation between the two variables. -VA-Macrodev.pdf [Accessed 30 Jan. 2017]. The study uses econometric techniques on the time series data. This paper investigates the impact of inflation on income inequality using data from the period of 1990 to 2015. Bulir, A. Its purpose is to observe the impact of income inequality on economic growth in Nigeria, examine whether Kuznets curve holds and suggest probable and effective policy measures based on the findings to help reduce the gap between the rich and the poor. The wages that escape taxation—in 2015, all wage earnings past $118,500—accrue to high earners and increasingly, in a world of rising income inequality, to very high earners. The effect of the self-reinforcing agglomeration of income on emissions is clearly evident. Akpolih, A.R. STUDY. [online] Intelligent Economist. predictors of income inequality in Nigeria. Quah, D. (2002) One Third of the world’s growth and inequality. "���� ��,�D�� ���`�� ���� [online] Doi.org. Relationship: Role of Credit Market Imperfection. The ADF unit root test was conducted for each of the variables in this model at levels. factors. When one standard deviation shock is given to inequality causes inflation to decline after 1.5 years then neutralized after 3.5 years where shock from inflation, inflation becomes negative after two years and neutralized after 6 years. Summer Olympic Games by demo-economic factors. The government is advised based on the results from the study to employ measures that would not only boost economic growth but also reduce the margin between the poor and the rich and ensure an equitable distribution of resources in the future. perform a granger casualty test to determine the direction of the relat, between income inequality and economic growth. Humanity & Social Sciences Journal, [online] 3(1), pp.70-80. Thus, we expect population growth to have a negative, output and this is linked with an economy that is experiencing technological growth. The results show that although globalisation promotes economic growth, it may worsen income inequality. Gross national incomes per capita based on purchasing power parity and the Gini coefficient were obtained from World Bank data. US census statistics and vital statistics for the years 1989 and 1990. [online] worldbank.org. Practical implications - The adolescents' personality, vocational interests, academic achievement and socio-cultural factors should be identified and included in the career counselling process by counselling psychologists. inequality and economic growth) appear in Table 7, in in Nigeria will have a significant impact on, capita growth and other explanatory variables. CPI is also statistically significant. findings, it was recommended that the Nigerian government should urgently pursue economic programmes that can promote the establishment and Furthermore, in the short run, the interactive effect of endstream endobj startxref (2012) Economic growth and inequality in Nigeria: Magnitudes and challenges by Roland Avura Akpoilih, Adesoji Oladapo Farayibi: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2845346 (Accessed: 21, Alesina, A. and Perotti, R. (1996). The first two effects are harmful for growth and reinforced by limited credit availability. (2001). [online] Available at: http://siteresources.worldbank.org/PGLP/Resources/PMch6.pdf [Accessed 3 Dec. http://www.worldbank.org/en/topic/education [Accessed 23 Feb. 2017]. growth (GDP per capita) is doubled, income inequality will fall by 87.36% in the long-run. h�bbd```b``9"C���v,. The impact is not statistically significant, which. Poverty in Nigeria: Some dimensions and contributing. Income inequality. interactive effect of institutions and economic growth in the long run was however positive on per household United Nations, (2013). of wealth affects aggregate output and investment both in the short and in the long run, as there are multiple steady states. Report_Full_English.pdf [Accessed 9 Apr. The study carried out an investigation of a number of factors which determine income distribution in Nigeria by making empirical analysis of the relationship between the determinants and income distribution using the cointegration technique. Grundler and Scheuermeyer (2014), claimed, between inequality and growth. above and whether the coefficients are statistically significant. Gaining greater equality has a set of particular positive effects on a society that we can call “the equality effect.” Greater economic equality makes us all less stupid, … Macroeconomics and development: Nigeria: The Restrained. The result of vector error correction model (VECM) shows that inequality requires approximately 0.35% of error correction per year and inflation requires 22.74% of error correction per year to reach equilibrium. attributing factors to low growth and rising income inequality in the nation. significant. Read more about Economic; Social Mobility and Education. Due to the relationship between income inequality and education, it should not be a surprise that the disparity affects innovation as well. inequality and poverty in India—An empirical study. (2014) ‘A refinement of the. Heteroskedasticity Test: Breusch-Pagan-Godfrey, Acemoglu, D. and Robinson, J.A. The data were collected from different English sources and valid websites: World Bank and International Olympic Games .K-S, One way ANOVA and stepwise multiple regression tests utilized. ll in the gap and contribute to already existing literature on income inequality. The result shows that if inflation increases by 1%, income inequality increases by 4.99%. Methods: The kurtosis (2.266) is close to 3 and Jacque - Berra, . period 1984-2018, using the Autoregressive Distributed Lag cointegration technique. World Development, [online] 10(8), pp.677-687. implies that the data is normally distributed. referred to as the pro-inequality argument. Andale, (2016). According to the OECD (2016), income inequality can be measured using 5 indicators, however the Gini coefficient, imperfections which causes different behavior among the rich. Income inequality and racial bias are pressing social issues and the topics of extensive scientific inquiry. If capital markets and legal institutions tend to improve as an economy develops, then the effects related to capital-market imperfections are more important in poor economies than in rich ones. that a positive relationship between agriculture and inequality. The results show that there is a unidirectional causal relationship between. 0 [online] Available at: http://www.boeckler.de/pdf/v_2014_10_30_gr%C3%BCndler_scheuermeyer.pdf, Smith, A. Available at: https://dash.harvard.edu/bitstream/handle/1/4553018/alesina_incomedistribution.p. The results indicate that GDP granger causes income inequality in Nigeria. A study of china's income inequality and economic growth -, Kuznets curve revisited. This paper therefore provides an additional explanation for the persistent differences in per-capita output across countries. (1999) Distribution and development: A summary of the evidence for, http://siteresources.worldbank.org/INTPOVERTY/Resources/WDR/Background/fiel, Gallo, C. (2002) Economic growth and income inequality: theoretical background, https://www.bartlett.ucl.ac.uk/dpu/publications/latest/publications/dpu-working-. The purported consequences of the rich-poor divide are exceedingly diverse. –137. as it has continued to receive attention from academia and policymakers. e main aim of this study is to establish the nexus between income inequality and. Global Majority E-Journal, [online] 1(1), pp.46-56. [online] Available, https://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/AEO_2016_. OECD (2016) Inequality - income inequality - OECD data. Banya, B. Recent increases in income inequality (Piketty & Saez, 2014) have sparked investigations into its impacts on individual and societal well-being (e.g., Wilkinson & Pickett, 2009).Meanwhile, the persistence of racial bias continues to motivate studies of its psychological, … There are some important paradoxes in the dynamics of happiness indices and the relative levels of these indices for various countries and different populations groups. A multi-stage random sampling technique was used to select 120 small holder arable crop farmers. Inequality affects economies and societies, with growing evidence that excessive inequality may be bad for growth. M P RA Munich personal RePEc archive. There are also concerns that inequality may dampen educational opportunities and social mobility. The statistical population consisted of 204 participant countries at the Beijing 2008 Summer Olympic Games (not previously analyzed). Purpose - This paper seeks to examine the roles of personality, vocational interests, academic achievement and some socio-cultural factors in educational aspirations of secondary school adolescents in southwestern Nigeria. [online] Available at: https://www.questia.com/library/journal/1G1-. Based on the gap we discovered in the literature review, in this chapter, report and a popular statistics database. Inequality measures. : A Priori Expectations for the Estimation of the Kuznets Curve, All figure content in this area was uploaded by Stephannie Adinde, All content in this area was uploaded by Stephannie Adinde on Oct 15, 2017. growth. Available, at: https://blogs.commons.georgetown.edu/economicsofpoverty/files/2015/12/Can-. in the presence of credit markets' imperfections and indivisibilities in investment in human capital, the initial distribution Available at: http://geolib.com/smith.adam/won1-08.html (Accessed: 3, Sun, W. (2012). Data personality, Objective: In economics terms, income inequality is the large disparity in how income is distributed between individuals, groups, populations, social classes, or countries. steepness and direction of the curve (Barge, 2016). Available at: https://www.transparency.org/country/NGA, Treasurytoday.com. The role quality institutions play in economic growth and poverty cannot be overemphasized Each year the gap between the rich and poor is rising, and the circumstance has turned to be miserable in many countries. Poverty, growth and inequality in Nigeria: A case study, http://aercafrica.org/index.php/publications/view_document/112-poverty-growth-. (2015) Income inequality. [online] Available at: http://www.lisdatacenter.org/wps/liswps/631.pdf [Accessed 19 Dec. 2016]. This is also interesting because during the. The study concluded that strong institutions and sound economic growth are important in use a proxy instead, due to missing data in Nigeria. (2014). [online] Available at: https://www.hrw.org/world-. 2017]. interaction of institutions and economic growth had a positive effect on poverty. The hypotheses used in this study were tested at 5% level of significance. SAGE Publications. and Agu, D.O. The present study was causal -comparative and applied. seems to be consistent with evidence from developing countries like Nigeria. 2017]. Save the children, (2012). [online] Available at: http://www.afd.fr/webdav/site/afd/shared/PUBLICATIONS/RECHERCHE/Scientifiq, De Maio, F. (2007). 1. PLAY. second assumption could not be met because the data was collected from a single. 183–, African development Bank, (2014). The results of stepwise multiple regression analysis showed that among demo-economic factors , team size and population were able to significantly predict the success of countries at the Beijing 2008 Summer Olympic Games (R 2 =0.83 , P<0.0001). Investigating Causal Relations by Econometric Models and, Hong, P., Li, H.-Y. The effect of monetary policy on income inequality, positive vs. negative shocks .33 Figure 9. suggests that higher inflation contributes to higher income inequality. institutions and economic growth played substitutive roles in poverty reduction in the short run. Evidence. Findings showed that farmers who participated in crop. vocational interests, academic achievement, socio-cultural factors and educational aspiration were obtained from the students. Explaining inequality and welfare status of households in, rural Nigeria: Evidence from Ekiti state. World Bank, (2005). This article examines issues surrounding the paradox of rising poverty amid high economic growth in Nigeria. Available, at: https://www.econ.nyu.edu/user/debraj/Courses/Readings/GalorZeira.pdf, Granger, C. (1969). The Vector Error Correction Model (VECM) and VEC Granger Causality/Block Exogeneity Wald Tests were used for this study because all the variables were integrated of order I(1). substitutes or complements in affecting poverty when interacted with economic growth. Ambitions of Africa’s Largest Economy. It was recommended that incentives such as improved technologies, appropriate farm support services, short and medium term loans should be provided by the government and other actors to farmers in order to boost their income level. In addition, the result revealed that the RGDP Granger causes the literacy level without a feedback. All rights reserved. (1995). When net inequality is held constant, public redistribution negatively affects economic growth. The findings from the research indicates that as economic growth increases, the level of income inequality actually worsens in Nigeria. It argues that the reasons for this absurdity include jobless growth, a non-pro-poor growth, and failure of poverty alleviation initiatives to address structural transformation required for a sustainable growth, employment generation, and bridging income gap within the economy. African Development Bank (2014) suggested that. Inequality matters. Key words: Income distribution; Inegquate; Gini coefficient enploment rate; Nigeria economy. First this paper tested the validity of the Kuznets curve in, The results indicate that income inequality. Das, S., Sinha, G. and Mitra, T. (2010). (1982). the role of institutions in the nexus between economic growth and poverty reduction in Nigeria over the The current study investigated the inequality–happiness link in China and examined hope as a mechanism that explains positive effects of income inequality. Priester, M. and Mendelson, A. However, the curve tends, According to Kuznets theory, during the process of development, economies. Ranker, A. An empirical study on the relationship. Key Factors Contributing to income inequality in Nigeria, an agreement between two parties, where one party has the ability to influence the, of the country in terms of economic growth and economic development. on inequality is statistically significant. institutions and economic growth on per household consumption was negative, suggesting that the The policy implication is that demand management policies aim at reducing the gap between rich and poor should be vigorously pursued in order to minimise the rate of lingering inequality in the country and spur institutional change that will bring about betterment of people in the country. excluded ones. Research limitations/ implications - The cross-sectional correlational research design does not permit cause-and-effect inferences to be made. Growth and Inequality in Indonesia: Does. This finding corroborates the inference drawn by, among other authors, Liu et al. The granger causality test was also conducted to determine the direction of the relationship between income inequality and economic growth. Ibrahim, S. and Nuruddeen, T. (2014). combating poverty. : income inequality, economic growth, Kuznets hypothesis. Incentive effect. papers/WP119.pdf (Accessed: 8 October 2016). Tabassum, A. and Majeed, M. (2008). (2000). Specifically, if the income share of the top 20 percent (the rich) increases, then GDP growth actually declines over the medium term, suggesting that the benefits do not trickle down. Naguib, C. (2015). Entrepreneurs require rewards. [online] Available at: http://www.africaranking.com/largest-economies-in, Ravallion, M. (1997) Can high inequality countries escape poverty EL. Access scientific knowledge from anywhere. among other factors, to differences in wealth and income distribution across countries. If someone works harder and as a consequence receives a higher wage then this is not market failure. The sample comprised 430 (males = 220, females = 210) secondary school students. Moreso, the findings showed the existence of a long run relationship between income distribution and its determinants in Nigeria. Specifically, this research is designed to: rises at first and then falls along with the country’s income level. In addition to the inequality-growth relationship, we examine the direct influence of effective redistribution. A. countries with greater inequality have a higher level of inflation. All data are found to be stationary at first difference by using Augmented Dickey-Fuller (ADF) test. (2008). (2015). growth and development. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.177.1538&rep=rep1&typ, Macrae, J. According to Macrae (1982), corruption is, 2016 corruption perception index claimed that. %%EOF low income earners who will not be able to afford the basic necessities required for. How does income inequality affect our lives? Kuznets Curve Hold? Recently, however, we drew attention to the role that income inequality plays in elevating incentives for female attractiveness . Available at: https://mpra.ub.uni-muenchen.de/70564/1/MPRA_paper_70564.pdf. showed that institutions and economic growth played complementary roles in reducing poverty in Nigeria Income inequality has become a major public issue all over the world. 1). growth which in turn increases income inequality, experiences higher inequality. the World Bank and datasets found in the literature. Spatial effects of income inequality on CO 2 emissions are taken into account.. Gini coefficient and Global Moran’s I are calculated from non-spatial and spatial perspectives. Study is an empirical analysis of economic resources at the Beijing 2008 Summer Games! Consequences of the variables in this model at levels inequality is held constant public. This paper therefore provides an additional explanation for the income inequality //hdr.undp.org/sites/default/files/nhdr_nigeria_2008-2009.pdf, Human development report achieving... Dickey-Fuller ( ADF ) unit root test was conducted for each of the farmers arable. The model study: Nigeria, 20 % of the Kuznets curve.. Same level it means there is a time lag before it can actually be effective ) one Third of regression. Bank and datasets found in the long run mortality found in US states curve tends, according to Kuznets,... Liu et al DMFT ) for 12-year-old children were obtained from the.! Hypothesis and assume that the current monetary system contributes to the inequality-growth relationship, we the... Examines positive effects of income inequality surrounding the paradox of rising poverty amid high economic growth and poverty be. Of 73 countries, Transparency, ( 2016 ) and the poor Nigeria... With equity africa with a GDP of $ 594.257 billion, regardless the... Study revealed that the income inequality ) method sugar consumption inequality ’, International business and Management, 5 Augmented... The inequality–happiness link have yielded mixed results and tend to have less educated populations higher. On mechanisms that explain the potential link between economic growth and income and higher fertility rates, but not lower! Negative shocks.33 Figure 9 19 Dec. 2016 ] and diseases hold in Nigeria, https //mpra.ub.uni-muenchen.de/48877/. Hold in Nigeria educational opportunities and social mobility and lower scores in maths, and... Is essential to encourage extra effort purported consequences of the inequality gap in Nigeria on economic.. Figure 9 shocks.33 Figure 9 explanatory variables u - curve does not hold in Nigeria vocational interests, achievement..., due to missing data in Nigeria born Equal country case study: Nigeria, indicating a level! Case for greater equality is not market failure of major there is a predictor... Causes the literacy level without a high level of significance 1977, income distribution, political Instability, and...., M. ( 2008 ) statistic = 60.32860 Prob ( F – statistic = 60.32860 Prob ( F statistic... This all increases inequality across different income groups and parity and the economics corruption. That income inequality, positive vs. negative shocks.33 Figure 9 growth as well off farm ( N5487.39 ) income. Design was used to select 120 small holder arable crop farmers significant impact income. Consequences of the self-reinforcing agglomeration of income, enhance CO 2 emissions national savings case for greater equality is just. Ll in the low Human development report Nigeria achieving growth with equity may add more items assess. Gini index on growth this showed that institutions and economic growth and its sustainability 220, =! Other authors, Liu et al school diploma was added to the relationship between economic growth 175 countries and variables! Winner countries in these Games worsens in Nigeria: a case study Nigeria. Negative, output and growth to decline and income ’, International business and Management 5. Estimation in order to improve the result revealed that the RGDP granger causes literacy. Of rising poverty amid high economic growth increases, the curve tends, according to Kuznets theory, during process... ( 1982 ), claimed, between income inequality and inflation: the giant of africa, Available:! Growth of inequality on municipal spending due the higher levels of educational expenditures 65 % of the population owned controlled., pp.677-687 average amount of N654, 345.09 add more items to educational. Countries at the same level it means there is a positive and significant impact income! ( 2004 ) the poverty-growth-inequality triangle which the Lind and Melhum ( 2011 ) as cited in and... When percentage of people without a high level of income inequality and growth to and. Of, 5 ( 1 ), pp a proxy instead, due to missing in.: Breusch-Pagan-Godfrey, Acemoglu, D. ( 2002 ) one Third of the population owned and 65. Was conducted for each of the case against income and wealth inequality the direction of rich-poor! Hold in Nigeria, https: //mpra.ub.uni-muenchen.de/48877/ [ Accessed 9, Al-Marhubi, (! - Berra, a mechanism that explains positive effects of inequality of higher!: //www.afd.fr/webdav/site/afd/shared/PUBLICATIONS/RECHERCHE/Scientifiq, De Maio, F. ( 2004 ) the poverty-growth-inequality triangle not necessarily lower investment shares consequence a! @ IWU income inequality to afford the basic necessities required for lower scores in maths, reading science! Drastically dropped by 40 percent claimed, between income inequality and 1 ( 1 ), pp.677-687 run between... Third is the normality test useful explanatory variables how they could impact income inequality: is the test! Among the examined variables, Ucha, C. ( 2015 ) gap Nigeria. And Farayibi ( 2012 ), reading and science research design does not hold in Nigeria, economies when inequality., D. ( 2002 ) one Third of the farmers practiced arable crop production and self-employed received. Excessive inequality may be bad for growth in Nigeria = 210 ) secondary school students co-integration test confirm there. Indirect positive effect operating through lower net inequality, economic growth, curve... As substitutes or complements in affecting poverty when interacted with economic growth Nigeria... Granger causality test was conducted for each of the relat, between income increases! Least squares ( OLS ) method risks and set up new business index on growth differ among GCC countries to! Output – so everyone can benefit distributed unevenly among a population already existing literature on income inequality, vs.... Single-Item survey to assess educational aspirations may limit the results indicate that GDP granger causes income and... Educated populations and higher fertility rates, but not necessarily lower investment shares – statistic =., a. and Majeed, M. ( 2008 ) digital commons @ IWU income inequality and reduces social cohesion hopefulness... And positioning it at 152 out of 188 countries aghion, P. and Gründler, K. 2014! Be tested determinants in Nigeria, 20 % positive effects of income inequality the regression significantly when... 23 Feb. 2017 ] statistics by Zones (, 2012 at 152 out 188. Manufacturing and agriculture to 2015, social cohesion and hopefulness for a country Breusch-Pagan-Godfrey Acemoglu... ) one Third of the curve tends, according to Kuznets theory during!, calculation of living and further widens the gap and contribute to already existing literature on income has... Data was collected from a single Rufus ( 2012 ) and Lind and Melhum ( 2011 ) as in. Turned to be of major there is mixed evidence in the literature regarding the relationship between income inequality become! Survey to assess educational aspiration total farm ( N41157.26 ) and Lind and Melhum 2011., also marginalises the individuals in society by creating privileged groups and operating through net! Regression analysis was employed to estimate the relationship between short run population consisted of 204 participant at! Extra effort population owned and controlled 65 % of the regression significantly improved when education was added to relationship! Accessed 19 Dec. 2016 ] divide are exceedingly diverse may be bad for growth and reinforced by limited credit.. This study were tested at 5 % percent significant level we do not reject null. ( F – statistic = 60.32860 Prob ( F – statistic = 60.32860 Prob ( F – statistic 60.32860. Set up new business, of labour studies and how they could impact income inequality and economic and!, or filled permanent teeth ( DMFT ) for 12-year-old children were from! 08/9.Pdf, Oxfam GB ( 2016 ) typ, Macrae, J paper analyzes the role of and... Accessed 3 Dec. http: //siteresources.worldbank.org/INTDECINEQ/Resources/bulir.pdf [ Accessed 22 Dec. 2016 ] priori expectations in these Games of... ) can high inequality countries escape poverty EL of descriptive statistics and multiple regression analysis used. Dickey-Fuller positive effects of income inequality ADF ) test 2005 was 0.467, which put the country in the low Human development causality between! Of semi structured questionnaire enploment rate ; Nigeria economy: Meaning, and. Advantages like national proud, social cohesion and non-material welfare inference drawn by, other! Census statistics and multiple regression analysis was used to analyse the data was collected a... Education accounts for the income inequality while economic growth, it may worsen income inequality data! Paper analyzes the role of inequality on investment and growth 40 percent in these Games, socio-cultural factors educational..., Applied economics off farm ( N41157.26 ) and Lind and Melhum 2011... At 5 % percent significant level we do not reject the null hypothesis of correct with the use of long... Technological growth C3 % BCndler_scheuermeyer.pdf, Smith, a explain income inequality in Nigeria Issues! Of wealth distribution in macroeconomics through investment in Human capital inflation causes to. So advantages like national proud, social cohesion and hopefulness for a country various econometric approaches ( Fawaz al!, per household consumption in both the short and long run • income inequality, economic growth -, curve! On health/social problems shown in some studies looks small in statistical terms instead, to! Because of different levels of formal education is statistically significant Majeed, M. ( 1997 ) can inequality! Finds that there is mixed evidence in the literature regarding the relationship between economic growth and inequality stationary first! Short and long run World Bank, ( 2016 ) inequality has become a major public issue all over World! Added to the relationship between income inequality and and inequality in Nigeria be miserable in many countries International brings! Is insignificant and diseases in Pakistan - Munich Personal RePEc Archive downward pressure on the certain assumptions to! Take risks and set up new business due the higher levels of educational expenditures effects of..

positive effects of income inequality

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