Exploring the effect of economic growth on income inequality in West African countries
Date
2021-05
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Abstract
This thesis addresses two major issues: first, the effect of economic growth on
income inequality in West African countries; and second, the impact of
some macroeconomic factors on income inequality in West African countries. For the
period 1990 to 2019, panel data for fourteen members of the Economic Community of
West African States (ECOWAS) is examined. In order to answer the questions, the
analysis employs a fixed-effects model. The findings of diagnostic experiments, such
as cross-sectional dependency, heteroskedasticity, serial correlation, and Hausman,
are used to choose the fixed effects model. The fixed-effects model confirms the
effect on income inequality. Consequently, a conclusion that
economic growth in West African countries has a negative and negligible effect on
income inequality is drawn. In West African nations, the rate of inflation has a
positive and significant effect on income inequality. On the other hand,
unemployment and literacy rates have a negative and significant effect on income
inequality. The thesis proposes that policymakers focus on raising literacy rates by
investing in public schools and adult education services and reducing the impact of
inflation by enacting economic policies that minimise inflation and income inequality.
Description
Undergraduate thesis submitted to the Department of Business Administration, Ashesi University, in partial fulfillment of Bachelor of Science degree in Business Administration, May 2021
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Keywords
economic indicators, World Bank data