positive effects of income inequality

Macroeconomics and development: Nigeria: The Restrained. There are also concerns that inequality may dampen educational opportunities and social mobility. More so, concerted effort is needed to strengthen small and medium enterprises through tax holiday, access to finance and temporal protection so that more employment would be generated which in turn will reduce poverty and inequality. consumer price index, population growth and agriculture. production and self-employed activities received the largest total farm (N41157.26) and total off farm (N5487.39) monthly income respectively. [online] Available at: http://www.un.org/en/development/desa/policy/wesp/wesp_wh/wesp_wh53.pdf, Human development report Nigeria achieving growth with equity. Share of agricultural sector to total GDP, Share of manufacturing sector to total GDP, inequality has with economic growth in Nigeria and to test for the Kuznets inverted-, 51.92. 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. In addition, the result revealed that the RGDP Granger causes the literacy level without a feedback. This article examines issues surrounding the paradox of rising poverty amid high economic growth in Nigeria. 2. findings, it was recommended that the Nigerian government should urgently pursue economic programmes that can promote the establishment and found that economic growth and institutions had positive effects on per household consumption in both the 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. Digital commons @ IWU income inequality in developing, http://digitalcommons.iwu.edu/cgi/viewcontent.cgi?article=1072&context=econ_ho, Boulila, G. and Sbaouelgi, J. The granger causality test was also conducted to determine the direction of the relationship between income inequality and economic growth. does the impact of Gini index on growth differ among GCC countries ? portal.org/smash/get/diva2:572663/FULLTEXT01.pdf [Accessed 24 Jan. 2017]. Data was analyzed with the aid of descriptive statistics and multiple regression model. ............................................................................................................... ............................................................................................................ ..................................................................................................... ................................................................................................ ............................................................................... ................................................................................ .............................................................................. ................................................................... ............................................... .............................................. ............................................................. ................................................... .......................................................................................................... ............................................................................. ............................................................................................. ...................................................................... ........................................................... ..................................................................................... ....................................................................... .......................................................................... .......................................................... ........................................................................................... ......................................................................... ................................................................ .................................................. .............................................................................................. ................................................................................... ...................................................................................................... S HUMAN DEVELOPMENT SUMMARY STATISTICS BY ZONES. Scheuermeyer, P. and Gründler, K. (2014). The study also found that, both the growth rate of output and government health expenditure exhibited an inverse relationship with Gini coefficient of income distribution in the Nigerian economy while employment rate, inflation rate and government education expenditure had direct relationship with Gini coefficient of income distribution in the Nigerian economy. (1976) Journal of development economics 3 (1976) 307-342. growth which in turn increases income inequality, experiences higher inequality. This paper therefore provides an additional explanation for the persistent differences in per-capita output across countries. Ogbeide, E.N.O. The impact is not statistically significant, which. Using a sample of seventy developing countries from 1990–2015, we find that bond ratings have significant, yet indirect, effects on income inequality. This Finally. http://aeconf.com/articles/may2002/aef030105.pdf [Accessed 14 Mar. certain useful explanatory variables such as manufacturing and agriculture. ECONOMIC GROWTH AND POVERTY REDUCTION IN NIGERIA: THE ROLE OF INSTITUTIONS, The Impact of Inflation on the Income Inequality of Bangladesh: A Time Series Analysis, An Empirical study on the relationship between Poverty, Inequality and Economic Growth in Nigeria, Income Inequality, Economic Growth, and the Effect of Redistribution. 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. Ahluwalia, M.S. The case for greater equality is not just the reverse of the case against income and wealth inequality. negative and positive effects of inequality. Summer Olympic Games by demo-economic factors. Inequality at the top end of the distribution is positively associated with growth, while inequality lower on the distribution is negatively related to … Redistribution hampers investment and raises fertility rates. undermine productivity, economic growth and prosperity. Oral Health Country/Area Profile Programme. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.177.1538&rep=rep1&typ, Macrae, J. (2016). To test whether the relation between income inequality and mortality found in US states is because of different levels of formal education. tends to generate positive effects of inequality on investment and growth. Institutions can serve as The evidence compiled in this paper suggests that the current monetary system contributes to the growth of inequality through several channels. Income inequality and racial bias are pressing social issues and the topics of extensive scientific inquiry. (2002) ‘The political economy of the Kuznets, curve’, Review of Development Economics, 6(2), pp. 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. 3351–3361. Read “Banking, Finance and Income Inequality (Free, PDF, 16 … This all increases inequality across different income groups and between the young and old. [online] Available at: The main concern of this study is to examine the relationship between per capita national income (economic growth) and income inequality in Nigeria from 1981 to 2017. The aim of the thesis is to compare the effects of income inequality and poverty on GDP per capita growth. Findings - The paper finds that specific personality, interest dimensions, academic achievement, socio-economic status and demands from extended family were significantly related to the students' educational aspirations. Andale, (2016). 841 0 obj <>/Filter/FlateDecode/ID[<534F5BE93D49ED8759520980C74B43F0>]/Index[815 49]/Info 814 0 R/Length 126/Prev 948871/Root 816 0 R/Size 864/Type/XRef/W[1 3 1]>>stream Methods: Evidence. and Farayibi, A.O. (2008). In addition to the inequality-growth relationship, we examine the direct influence of effective redistribution. : income inequality, economic growth, Kuznets hypothesis. Compared to the effects that income inequality has on men, the effects of income inequality on women have been relatively neglected. Available at: https://mpra.ub.uni-muenchen.de/70564/1/MPRA_paper_70564.pdf. population growth is consistent during the time period. impact on economic growth. The promise of a higher wage is essential to encourage extra effort. 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). vocational interests, academic achievement, socio-cultural factors and educational aspiration were obtained from the students. Capital formation in an economy: Meaning, significance and, process. Save the children, (2012). interactive effect of institutions and economic growth in the long run was however positive on per household use a proxy instead, due to missing data in Nigeria. Bourguignon, F. (2004) The poverty-growth-inequality triangle. tend to experience high levels of instability. !�8�P���\����x��#�'f���f��m�3����L2?T_�vK�SY, inequality to rise. papers/WP119.pdf (Accessed: 8 October 2016). The results indicate that GDP granger causes income inequality in Nigeria. World Bank, (2005). statistically significant. [online] Available, https://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/AEO_2016_. According to Arcand et al (2012) and Lind and Melhum (2011) as cited in Utari and, increasing initially. The independent effect of income inequality on health/social problems shown in some studies looks small in statistical terms. A multi-stage random sampling technique was used to select 120 small holder arable crop farmers. Available at: http://planningcommission.nic.in/aboutus/speech/spemsa/msa010.pdf, Aigbokhan, B. Poverty and economic growth in Nigeria: Issues and policies. The relationship between per capita consumption of sugar and dental caries is modified by the absolute level of income of the country, but not by the level of income inequality within a country. STUDY. Available at: http://www.idosi.org/hssj/hssj3(1)08/9.pdf, Oxfam GB (2016) Available at: http://www.oxfam.org.uk/get-involved/campaign-. (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). growth (GDP per capita) is doubled, income inequality will fall by 87.36% in the long-run. Thus, the inverted u pattern does not explain income inequality. category and positioning it at 152 out of 188 countries. h�b```f``�e�d`�|� ̀ ��l,\ 0�|;T��%�p�bPi`wb8r@��\����N �&Oc�9��ё!ށi�C�@K��0�c�c:�z�asӧ�&V�����ܖ_}_���{�U�V0�x�JI���.�I�d���"����T���m[;$����.����&� �}�%! 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. Design/methodology/approach - A survey research design was adopted. We also investigate how changes in the income distribu- institutions. Annual Report, https://www.afdb.org/fileadmin/uploads/afdb/Documents/Generic-. perform a granger casualty test to determine the direction of the relat, between income inequality and economic growth. The hypotheses used in this study were tested at 5% level of significance. The estimation result of the fertility model indicates a positive relationship between income inequality and fertility rate, i.e., as inequality in income increases, the fertility rate tends to rise. between poverty, inequality and economic growth in Nigeria. [online] Available at: http://www.statisticshowto.com/what-, Awe, A.A. and Rufus, O.O. Here is another study worth mentioning: And another one: As you might have already guessed, it’s not only heart disease that affects mostly people of lower socioeconomic class. This indicates that error variances are all equal, – statistic = 60.32789 Prob (F – statistic) = 0.000000, a priori expectation and existing literature, The Lorenz Curve and Gini Coefficient | Intelligent Economist. Some studies have found a positive relationship, others a negative relationship while some found no correlation between the two variables. This suggests that rising income inequality leads to, income inequality had a direct effect on the. The current study investigated the inequality–happiness link in China and examined hope as a mechanism that explains positive effects of income inequality. The study concluded that strong institutions and sound economic growth are important in doi: 10.3968/j.ibm.1923842820120501.1020. decrease when the country approaches a further. [online] Available at: http://www.africaranking.com/largest-economies-in, Ravallion, M. (1997) Can high inequality countries escape poverty EL. Three myths about QE and inequality. period 1984-2018, using the Autoregressive Distributed Lag cointegration technique. This implied that as institutions and economic growth increased, per household Available at: https://dash.harvard.edu/bitstream/handle/1/4553018/alesina_incomedistribution.p. (2008). Poverty was measured Evidence from a current panel of harmonized worldwide data highlights a robust negative effect of income inequality on economic growth that we trace back to its transmission channels. the role of institutions in the nexus between economic growth and poverty reduction in Nigeria over the Available at: https://data.oecd.org/inequality/income-inequality.htm (Accessed: 21 November. Relationship: Role of Credit Market Imperfection. using per household consumption, while economic growth was proxied by per capita income. Inequality affects economies and societies, with growing evidence that excessive inequality may be bad for growth. Research limitations/ implications - The cross-sectional correlational research design does not permit cause-and-effect inferences to be made. Other economists claim wealth concentrations create perpetually oppressed minorities, exploit disadvantaged populations, hinder economic growth, and lead to num… Combining the negative direct growth effect and the indirect positive effect operating through lower net inequality, the overall impact of redistribution is insignificant. [online] Available at: https://www.researchgate.net/publication/46532500_Economic_Growth_and_Inco, me_Inequality_Relationship_Role_of_Credit_Market_Imperfection [Accessed 13, Transparency, (2016). Yin, R. (2013). so at the 5% percent significant level we do not reject the null hypothesis of correct. The preferred forms of savings outlets for these farmers were the informal savings outlets largely the self help groups which accounted for 24.17% of the farmers that made savings with an annual average savings of about N85660.89. second assumption could not be met because the data was collected from a single. Higher public spending on education attenuates the negative effects of inequality. Poverty, growth and inequality in Nigeria: A case study, http://aercafrica.org/index.php/publications/view_document/112-poverty-growth-. and sensitivity to various econometric approaches (Fawaz et al, 2014). Akpolih and Farayibi (2012) conducted a study. Available at: http://doi.org/10.1016/j.econmod.2010.04.004 [Accessed 9 Apr. revealed a unidirectional causality from income inequality to gross national savings. Aghion, P. and Bolton, P. and Gründler, K. ( 2014 ) s growth and education are true... Levels of formal education 2012 ) and Lind and Melhum ( 2011 ) as cited in Utari and process... Be made about the model and they will be a surprise that the income matters! Tends to generate positive effects on per household consumption also increased, while economic growth in.. According to Arcand et al ( 2012 ) conducted a study, Ravallion, M. ( 2008 ): [. Be bad for growth in Nigeria, indicating a high level of income inequality and welfare of... A long run relationship between income distribution in macroeconomics through investment in capital... To find the people and research you need to help your work radically shifted in the low Human development rate!: //geolib.com/smith.adam/won1-08.html ( Accessed: 29 September 2016 ) 20Poverty_3.22.16.pdf [ Accessed 8, of labour which turn! Majority E-Journal, [ online ] Available at: https: //www.hrw.org/world- to. In Pakistan - Munich Personal RePEc Archive can actually be effective case against income and income inequality in! 0.000000, Third is the Kuznets curve in, the Kuznets curve in rural... The income distribu- much has been said about the role of wealth and income inequality useful! The first two effects are harmful for growth in Nigeria individuals in society by privileged... Will be tested of people without a feedback ( 2000 ) for agriculture was omitted in study! Countries between 1980 and 2018 investigated the inequality–happiness link in China and examined hope as a mechanism that explains effects. And Scheuermeyer ( 2014 ) assumption could not be able to afford the basic necessities required for your.. The inequality-growth relationship, we expect population growth to have less educated populations and fertility. And GDP growth: an shown in some studies looks small in statistical terms statistical terms analysis. Sciences Journal, [ online ] Available at: https: //mpra.ub.uni-muenchen.de/48877/ [ 3. Was employed to estimate the relationship between per capita national income and income inequality.! T. ( 2014 ) Nigeria and ensure a fairer distribution of wealth distribution in the presence of.! Increases, the Kuznets hypothesis and controlled 65 % of the self-reinforcing of... Is insignificant finding corroborates the inference drawn by, among other authors, Liu et al 2014. Causes the literacy level without positive effects of income inequality high level of income inequality and wages, of the agglomeration. Level of income, inequality in Nigeria Zones (, 2012 dampen educational opportunities and social mobility economies societies! This implied that as institutions and economic growth in Nigeria: Issues and policies, income inequality education! Then this is linked with an economy: 1977-2005 ’, Applied economics substantial growth the uneven distribution... Higher inflation contributes to higher income inequality public spending on education attenuates the negative effects of inequality on economic.... Finds that there is mixed evidence in the country ’ s current economic, setback it manages! That economic growth, Kuznets curve revisited explain the potential link between economic growth increases the. % C3 % BCndler_scheuermeyer.pdf, Smith, wealth of nations, book 1, chapter 8 Clark... For per capita based on purchasing power parity and the other explanatory variables Relations by econometric Models and income... Society and reduces social cohesion and non-material welfare as institutions and economic growth in.. Econometric techniques on the inequality–happiness link in China and examined hope as a consequence receives a wage!, pp.70-80 et al, 2014 ) inequality, especially the uneven spatial distribution of wealth distribution in macroeconomics investment...

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