DETERMINANTS OF INCOME INEQUALITY IN NIGERIA 1985-2020

AGIM, Fidelis Akwagiobe and OKORIE, George Chisom (2022) DETERMINANTS OF INCOME INEQUALITY IN NIGERIA 1985-2020. INTERNATIONAL JOURNAL OF COMMUNICATION AND SOCIAL SCIENCES (IJCSS), 1 (3). pp. 212-222. ISSN 2643-6388

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Abstract

The wide gap of income inequality in Nigeria has to a reasonable extent affected the living standard of the low income class in the country. This study was informed by the inability of government’s policy analysts to critically ascertain different determinants of income disparity to ensure stability in Nigeria. It is on this premise we explore the determinants of income inequality in Nigeria from 1985 to 2020 with time series data. The study engages Johansen multivariate integration approach and Vector Error Correction Model (VECM) after all the variables were confirmed stationary at first difference and integrated at similar order I(1) using ADF test. The Cointegration measure established the existence of long-term relationship between the variables used to capture the determinants of income inequality. Also revealed was a high yearly speed of adjustment of the variables towards their long-run equilibrium path to the tune of 80.95% approximately. The result of the study shows that in the long run variables such as Unemployment Rate (UNM), Personal Income Tax (PIT) and Corruption (COR) have statistically significant impact on income inequality. The implications of the above result are that UNM, PIT and COR are determinants of income inequality in Nigeria. Based on these outcomes, it was therefore recommended among others that government should initiate employment subsidies to address high level of unemployment in the country as this would curb income gap.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Management and Social Sciences
Depositing User: mrs chioma hannah
Date Deposited: 18 Jan 2023 09:50
Last Modified: 18 Jan 2023 09:50
URI: http://eprints.gouni.edu.ng/id/eprint/3954

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