Income Inequality Effects of Globalization in Oil-Rich Nigeria: Evidence from Time Series

Abstract

Incidences of rising income inequality in Nigeria have raised questions on its link with globalization. Using quarterly time-series data on an empirical model which is hinged on Stolper-Samuelson theorem, the Johnson co-integration test and error correction model showed that globalization, technology and foreign direct investment significantly heightened income inequality while that of productivity significantly diminished income inequality in Nigeria in the long-run. This study recommends support for domestic entrepreneurship through import substitution and export promotion strategies so that Nigeria to enjoy gains from globalization. Furthermore, increased access to public service such as health care and high quality education among the poor and vulnerable is desirable for sustained increase in labour productivity.