Human Capital Impacts of Income Inequality: An Extensive Empirical Analysis from the African Continent

Abstract

This paper evaluates the impacts of income inequality on life expectancy in African countries. The empirical analysis has been performed on a panel dataset of 52 African nations covering the period of 1995 to 2018. For estimating the inequality-health relationship, I have used Two-Stage Least Squares (2SLS) technique and a Panel Error Correction Model (PECM). The long-run cointegrating relationship was estimated using a Panel Dynamic Ordinary Least Square (PDOLS) estimator. The outcomes suggest that income inequality has negatively affected life expectancy at birth in the African continent overall. Though income inequality seems to have improved health in the short-run, in the long-run, income inequality had deleterious effects. A series of steps has been followed to check the soundness of the result of the main empirical examination and it is confirmed that the results are robust.