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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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    References listed on IDEAS

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    2. Joseph I. Uduji & Elda N. Okolo-Obasi & Simplice A. Asongu, 2019. "Sustaining cultural tourism through higher female participation in Nigeria: The role of corporate social responsibility in oil host communities," Working Papers of The Association for Promoting Women in Research and Development in Africa (ASPROWORDA). 19/003, The Association for Promoting Women in Research and Development in Africa (ASPROWORDA).
    3. Joseph I. Uduji & Elda N. Okolo-Obasi & Simplice A. Asongu, 2019. "The Impact of CSR Interventions on Female Education Development in the Rural Niger Delta Region of Nigeria," Research Africa Network Working Papers 19/070, Research Africa Network (RAN).
    4. Mark Edem Kunawotor & Godfred Alufar Bokpin & Charles Barnor, 2020. "Drivers of income inequality in Africa: Does institutional quality matter?," African Development Review, African Development Bank, vol. 32(4), pages 718-729, December.
    5. Stephen D. Younger & Flora Myamba & Kenneth Mdadila, 2016. "Fiscal Incidence in Tanzania," African Development Review, African Development Bank, vol. 28(3), pages 264-276, September.
    6. Dagim Tadesse Bekele, 2020. "Effect of Macroeconomic, Demographic, and Governance Factors on Income Inequality of Selected sub-Saharan Africa Countries," Journal of Economic Development, Environment and People, Alliance of Central-Eastern European Universities, vol. 9(1), pages 60-70, September.
    7. Joseph I. Uduji & Elda N. Okolo-Obasi, 2018. "Young Rural Women Participation in the E-Wallet Programme and Usage Intensity of Modern Agricultural Inputs in Nigeria," Working Papers of the African Governance and Development Institute. 18/062, African Governance and Development Institute..
    8. Mukherjee, Shantanu & Lusigi, Angela & Kamwendo, Eunice & Bonini, Astra, 2017. "Income Inequality Trends in sub-Saharan Africa: Divergence, determinants and consequences: Inequality, Gender and Human Development in Africa," UNDP Africa Reports 267647, United Nations Development Programme (UNDP).
    9. Kouassi YEBOUA, 2021. "Fiscal policy and growth-inequality tradeoffs: Bayesian evidence from Cote d’Ivoire," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(626), S), pages 297-310, Spring.
    10. Saifullahi Sani Ibrahim & Haruna Mohammad Aliero, 2020. "Testing the impact of financial inclusion on income convergence: Empirical evidence from Nigeria," African Development Review, African Development Bank, vol. 32(1), pages 42-54, March.
    11. NWOSA Philip Ifeakachukwu, 2020. "Globalisation, Economic Growth and Income Inequality in Nigeria," Indian Journal of Human Development, , vol. 14(2), pages 202-212, August.

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    More about this item

    Keywords

    Economic growth; Main drivers; Income inequality; Income redistribution; Southern Africa;
    All these keywords.

    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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