Publication Date: 2023/12/01
Abstract: Nigeria's economy is expanding, and the country has the human capital and economic resources to lift millions out of poverty. Despite being Africa's largest economy, economic inequality and its attendant economic implications have reached alarming proportions. Against this context, the study investigated the impact of income inequality on Nigerian economic growth. It used secondary time series data spanning the years 1980 to 2022. The data set was initially checked for stationarity using the Augmented Dickey Fuller (ADF) test. In addition, the research method used Bound test approach for examining long-run and short-run asymmetry effects using Nonlinear Autoregressive Distributed Lag Model (NARDL). The NARDL Bound test verified that the variables in the research had a long- run connection. It also demonstrated that the calculated model correctly captures asymmetries in the responses of the economic growth (GDPR) to changes in positive and negative income inequality. The positive changes to income inequality indicated an increasing but not significant effect on economic growth while negative changes to income inequality indicated an increasing and significant effect on economic growth in the long-run. On bases of these findings, the study recommended for government and the private sector to step-up measure for income redistribution through directly investing in opportunities for the poor to boost their capacity in generating income. Among such measures includes; providing access for micro-credit facilities, prioritizing investment in functional education and training as well as healthcare facilities and making it accessible to the people to increase the capacity of the human capital for sustainable economic growth.
Keywords: Income Inequality, Economic Growth and NARDL Model.
DOI: https://doi.org/10.5281/zenodo.10245728
PDF: https://ijirst.demo4.arinfotech.co/assets/upload/files/IJISRT23NOV1293.pdf
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