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ICT, Income Inequality and Economic Growth Nexus in South Africa

Author

Listed:
  • M.T. Musakwa

    (University of South Africa)

  • N.M. Odhiambo

    (University of South Africa)

Abstract

This study examined the causal relationship between ICT, income inequality and economic growth in South Africa using data from 1990 to 2021. Three measures of ICT were used in the study, namely fixed telephone lines subscription, mobile cellular subscriptions and the proportion of people using the internet to the total population. Employing the autoregressive distributed lag approach, the study found a unidirectional causal flow from income inequality to ICT across all measures of ICT employed. Another unidirectional causal flow from economic growth to ICT was found in the short run when ICT was measured by fixed telephone lines and mobile cellular. When internet access was used as a measure of ICT, a bidirectional causality between internet access and economic growth in the short run and a unidirectional causal flow from internet access to economic growth was confirmed. Across all three measures of ICT, no causal relationship was confirmed between economic growth and income inequality. The study points to the importance of economic growth in increasing ICT access and the crucial role that internet access has on economic growth in South Africa. Policy implications are discussed.

Suggested Citation

  • M.T. Musakwa & N.M. Odhiambo, 2024. "ICT, Income Inequality and Economic Growth Nexus in South Africa," Working Papers WP092024, African Economic and Social Research Institute (AESRI).
    • Handle: RePEc:afa:wpaper:wp092024
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    References listed on IDEAS

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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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