Effect of Income Inequality on Health Indicators in Nigeria (1980-2014)

Abstract

The rising profile of income inequality and the challenges it poses on the health of the entire citizenry in Nigeria over the pass years has brought about an increase in mortality rate and low life expectancy. Thus, this study examined the effect of income inequality, per capita income, education level and savings level on health indicators proxied by mortality and life expectancy rate in Nigeria using stationary, co-integration test and dynamic ordinary least square (DOLS) method. The study used time series data from International Monetary Fund World Economic Outlook which spanned from 1980-2014. The unit root test applied to the variables showed that the variables were stationary in the short run and co-integration test confirmed a long run relationship between the variables. Furthermore, the study showed that income inequality has an inverse effect on mortality rate. However, direct relationship existed between income inequality and life expectancy rate in the model. Finally, per capita income, education level and saving level employed as control variables have positive effect on health indicators in Nigeria. The study therefore concluded that health indicators are highly influenced by income inequality, per capita income, education level and savings level in Nigeria.