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Empirical Analysis of the Main Drivers of Income Inequality in Southern Africa

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  • John C. Anyanwu

    (Development Research Department, African Development Bank)

Abstract

Using the dynamic system GMM estimation procedure, this paper empirically analyzes the principal drivers of market income inequality in Southern Africa, which has the highest income inequality in Africa. Our novel finding shows strong support for a dynamic, non-monotonic, inverted U-shaped, effect of inequality in the model. We find evidence of existence of the Kuznets curve in the sub-region. A non-monotonic, inverted Kuznets-type effect is found for political globalization. Our results show that access to secondary education and natural resources dependence strongly and significantly equalize income. We find that population growth and domestic investment rate appear to be income disequalizing.

Suggested Citation

  • John C. Anyanwu, 2016. "Empirical Analysis of the Main Drivers of Income Inequality in Southern Africa," Annals of Economics and Finance, Society for AEF, vol. 17(2), pages 337-364, November.
    • Handle: RePEc:cuf:journl:y:2016:v:17:i:2:anyanwu
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    Keywords

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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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