Income inequality and economic growth : an empirical analysis of Kenya

Kibara Manyeki John and Kotosz Balázs: Income inequality and economic growth : an empirical analysis of Kenya.

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Abstract

Despite the well-known potential benefits of equality of income in economic growth, the statistics for Kenya show that income is heavily skewed in favour of the rich and against the poor with the country’s top 10% households controlling 42% of the total income while the bottom 10% controls less than 1%. The existing empirical evidence for the Kenyan economy does not shed light on whether there is a robust association between income inequality and growth over time. This paper provides an empirical investigation on the relationship between income inequality and economic growth and the hypothesis addressed was: inequality is harmful for growth. We contribute to the literature by employing an autoregressive distributed lag model using a time series date spanning from 1990–2015. The study found a significant positive but weak long run relationship between income inequality and growth. The short run was a strong positive relationship, which was significant at 1% level. This income inequality favours the rich, and therefore, to ensure fair distribution of wealth and a balanced growth, a policy goal should be equity in income distribution to reduce excessive income disparities. More research should be carried out on all other measures of inequality, to bring to light, which among them is more influential to GDP growth.

Item Type:	Conference or Workshop Item
Heading title:	International relations
Journal or Publication Title:	Proceedings of the Central European PhD Workshop on Technological Change and Development
Date:	2020
Volume:	4
ISBN:	978-963-306-741-3
Page Range:	pp. 338-356
Language:	English
Publisher:	Faculty of Economics and Business Administration Doctoral School in Economics
Place of Publication:	Szeged
Event Title:	Central European PhD Workshop on Technological Change and Development
Event Type:	Conference
Event Location:	Szeged
Event Dates:	2019. április
Related URLs:	https://acta.bibl.u-szeged.hu/77650/
Uncontrolled Keywords:	Gazdasági növekedés - Kenya, Jövedelmi egyenlőtlenség - Kenya
Additional Information:	Bibliogr.: p. 352-356. ; ill. ; összefoglalás angol nyelven
Subjects:	05. Social sciences 05. Social sciences > 05.02. Economics and business
Date Deposited:	2022. Dec. 06. 11:59
Last Modified:	2022. Dec. 06. 11:59
URI:	http://acta.bibl.u-szeged.hu/id/eprint/77669

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