INCOME INEQUALITY AND HEALTH OUTCOMES IN NIGERIA

Abstract

Inequality of income represents a substantial disparity in the distribution of income in a country and it might hold adverse consequence for health. Plummeted income can reduce the desire to seek healthcare thereby undermining health outcomes in Nigeria. This study examines the effect of income distribution disparity on life expectancy and determines the causal relationship between health outcomes and income inequality in Nigeria. The income inequality-health theory provided the theoretical framework for the study. Data were obtained from World Bank Database, Central Bank of Nigeria Statistical Bulletin and United Nations Database. The income inequality was measured using Gini coefficient and health outcomes was measured by life expectancy. Autoregressive Distributed Lag model was estimated to examine the impact of income inequality on life expectancy. Toda-Yamamoto causality test was used to determine the causal relationship between life expectancy and income inequality. Income inequality had a negative impact on life expectancy both in the long-run and short-run but only statistically significant in the long-run. There is unidirectional causality running from life expectancy to Gini coefficient. Efforts to reduce income differentials among individuals should be pursued by policymakers. Providing proper budgetary funding of public health care service will reduce the consequences of income distribution disparity and improve health outcome in Nigeria