ABSTRACT
This study examined the relationship between income inequality, poverty and economic growth. It also analyzed the impact of income inequality on economic growth, the effect of poverty on economic growth and assessed the impact of income inequality on the effect of economic growth on poverty. This study made use of annual times series secondary data. Data on GDP, inequality, poverty, population, public expenditure on education, corruption, unemployment, per capita income and inflation were sourced from World Development Indicators (2020), Central Bank of Nigeria Statistical Bulletin (2020), National Bureau of Statistics (2020) and Kneoma (2020). The data collected were analysed using econometric techniques, particularly, Auto regressive Distributed lag (ARDL) Model. The analysis performed are unit root, using both Augmented Dickey-Fuller (ADF) test and the Phillip and Perron (PP) test, the lag order of the ARDL models using VAR lag selection criteria and bound test. The results showed that income inequality has a negative but insignificant impact on economic growth in Nigeria. While poverty has a negative but insignificant relationship with economic growth, income inequality and economic growth has a negative but significant relationship with poverty.
In conclusion, to lessen the level of inequality and poverty that will ensure Nigeria’s economic growth and development, there is the need for plausible and viable economic policies and strategies. For instance, government should empower people in rural areas by funding projects and creating productive activities to generate higher income for a better life.
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