Education, Electricity Access, and Income Inequality in Nigeria

Abstract

Education and electricity access are argued to be important determinants in the income inequality literature, especially with regard to developing countries. This present study explores in Nigeria the roles of both education and electricity access, as well as the interaction of the aforementioned variables for income inequality over the period of 1990 to 2019. Utilizing Autoregressive Distributed Lag (ARDL) estimation preceded by the Augmented Dickey-Fuller (ADF) unit root test and ARDL bounds test for cointegration, the study found that while there was no long-run relationship between income inequality and it's determining variables, including education and electricity access, in the short run, electricity access was significant for reducing income inequality, while education was not significant for income inequality in Nigeria. On the other hand, education in the presence of greater electricity access was found to play a significant role in raising income inequality in Nigeria. The policy implications derived from the study findings emphasized the need for greater creation of employment opportunities by the Nigerian government, while electricity is made affordable for greater access by the Nigerian populace and is adequate in supply. Recommendations were also proffered based on the findings of the study.