The impact of education on income inequality: A comparative analysis of Nigeria and South Africa
Graduate Student, Economics, Kent State University, Kent, Ohio, USA.
Research Article
World Journal of Advanced Research and Reviews, 2024, 21(02), 1565–1575
Publication history:
Received on 14 January 2024; revised on 19 February 2024; accepted on 22 February 2024
Abstract:
Nigeria is plagued with the problem of poverty, and this is exacerbated by the problem of income inequality. Inequality has also limited the opportunities of individuals in Nigeria as Valentine (1968) said that “the essence of poverty is inequality; in slightly different words the meaning of poverty can be said to be deprivation”. The Gini coefficient of Nigeria lies between 40 and 60% (Bakare A.S, 2012). Also, South Africa has one of the worst cases of income inequality in the World, As South Africa’s Gini index increased from 0.64 in 1995 to 0.69 in the year 2005 which is one of the highest in the world. Studies will be carried out on both countries to further understanding on the relationship between income inequality and Education. With the aid of descriptive and empirical analysis, this study aims at identifying factors that are responsible for the high levels of income inequality, with a focus on Education growth in Nigeria and South Africa. Both countries will be compared using time series data spanning from 1981 to 2016.
The study examines the effect of education on income inequality in Nigeria and South Africa and examines if a long-run relationship exists between education and income inequality in Nigeria and South Africa. The Johansen Cointegration and Vector Error Correction Model were applied. The result of the Johansen Cointegration shows that there is a long-run relationship between the independent variables –Inflation, Real Gross Domestic Product, Foreign Direct Investment and Primary School Enrollment rate in Nigeria and South Africa. Findings also attest to the impact of education on income inequality in Nigeria but not in South Africa as further research showed that the income inequality situation in South Africa was connected to racial segregation. It was concluded that the government should devote more attention to this dwindling sector so as to reduce the income gap in the Country.
Keywords:
Education; Income; Inequality; Poverty
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