Does Reduction in Inequality of Income Distribution Matter for Poverty Reduction? Evidence from Nigeria’s Poverty Trends
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In recent years, the debate on whether growth is sufficient for poverty alleviation or it should be accompanied by the establishment of income distribution policies has been a subject of controversy in economic development discourse. While the debate is still inconclusive, there are strong arguments that though growth is good for the poor; nonetheless, growth with redistribution is expected to provide even better outcomes. This study seeks to supplement the debate by providing empirical evidence from Nigeria’s poverty trends. The paper estimated poverty elasticity with respect to growth and inequality, the theoretically well-established pro-poor growth index and growth-inequality trade-off index in the context of Nigerian economy spanning between the period 1970 and 2018 using ARDL-Bounds Testing Approach to Cointegration. The results obtained revealed that high poverty elasticity with respect to inequality measures confirm the importance of inequality in poverty reducing effort. Thus, economic growth policies that promote an increase in income in conjunction with a reduction in income disparities are more effective in combating poverty in Nigeria than those that focus only on raising RGDP per capita growth.
JOUR
Young, Ademola Obafemi
2019
International Research Journal of Finance and Economics
172
48-72
2859