International Journal of Scientific and Management Research

Effect of Income Inequality on the Economic Growth of Nigeria

Nkiru Patricia CHUDE¹ & Daniel Izuchukwu CHUDE^2
1&2 Lecturer, Department of Banking and Finance, Chukwuemeka Odumegwu Ojukwu University, Igbariam Campus, PMB 2016 Awka Anambra State, Nigeria
DOI –http://doi.org/10.37502/IJSMR.2023.6102

Abstract

This study investigated the effect of income inequality on the economic growth in Nigeria from 1981-2021, Ordinary least squared (OLS) method of data analysis was adopted because of its Best Linear Unbiased Estimators (BLUE) properties. The variables used were sourced from Central Bank of Nigeria Statistical Bulletin. The variables used were income inequality, employment, education, poverty and government capital expenditure and real gross domestic product. The collected data were sourced from central bank of Nigeria (CBN) statistical bulletin 2021 The study adopted the unit root test, co-integration approach, as well as Error Correction Mechanism. E- View software was used for the analysis. The study found that: Income inequality has no significant effect on economic growth in Nigeria: Employment rate has significant positive effect on economic growth in Nigeria: Poverty has significant negative effect on economic growth in Nigeria: The study recommends that, there is need for the government to change the education system to ensure that new training methods, which develop existing skills and create skills where they do not exist are implemented. There is also a need to put in place training policies that will strengthen the competitive capacities of the work force and increase the competitiveness. The provision of employment opportunities is the peak of any economic and social reform plan that aims to improve quality of life by achieving sustainable human development.

Keywords: Income inequality, employment, education, poverty and government capital expenditure and real gross domestic product.

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