A Spatial Econometrics Analysis of Educational Distribution and Regional Income Disparities in Nigeria

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This document is an abstract from the 1st International Conference on Emerging Trends in Scientific Research held in 2014. It summarizes a study that analyzed the relationship between educational distribution, regional income disparities, and economic development in Nigeria. The study developed a regional production function model incorporating education inequality measured using a Theil index. Spatial econometric analysis found evidence that a more equal distribution of education has significant positive effects on regional per capita income in Nigeria. Education distribution was a stronger determinant of income than overall educational attainment. The results confirm that reducing inequality in education distribution across regions could effectively reduce income disparities and promote economic development in Nigeria.

Education

Abstract of Emerging Trends in Scientific Research, 2014, Vol.1
DOI: 10.18488/journal.1002/2014.1/1002.1
1st
International Conference on Emerging Trends in
Scientific Research
15-16 March, 2014
Pearl International Hotel Kuala Lumpur, Malaysia
Conference Website: www.pakrdw.com
75
Paper ID: 305/14/1
st
ICETSR
A Spatial Econometrics Analysis of Educational Distribution
and Regional Income Disparities in Nigeria
Habibu Mohammed Umar1
--- Russayani Ismail2
--- Lim Hock Eam3
Abstract
Understanding the determinants of regional economic disparities is essential to designing
an effective policy framework to address regional inequalities and their disruptive
potentials. The role of educational attainment in the regional income determination has
been widely investigated in the economic literature. So far, less attention has been given
to the importance of educational distribution in regional income determination. To
contribute in this respect, this paper developed a regional production function model that
incorporates education inequality as a determinant of regional income disparity in Nigeria.
Using micro data from the recent Living standard measurement survey (LSMS) on
Nigeria, we calculate inequality of education using Theil index. The contribution of each
region to the overall inequality obtained from the Theil index is considered. Employing a
cross sectional spatial econometric approach, we found evidence that more equal
distribution of education has significant and positive effects on regional per capita income.
Interestingly, education distribution out performs educational attainment in the model. The
results also confirm the role of education inequality in accounting for regional income
differences in Nigeria. We conclude that investing for equitable distribution in education
will be an effective policy to reduce regional disparities in Nigeria as well as an efficient
means to promote economic development.

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Abstract: The crucial role of education in the overall development of a nation cannot be overemphasized. It is not only seen as a key to poverty reduction and vehicle for promoting equity, fairness and social justice but also helps to supply the essential human capital which is a paramount condition for sustained economic development. The basic objective of this paper investigates the authenticity of education being the pathway to sustainable economic development in Nigeria, using annual time series data from 1981 to 2014. The paper employs OLS methodology using Cobb Douglas production with white heteroskedasticity testing, wald test analysis and breusch pagan godfrey autocorrelation test. The results shows that considering the magnitude 1% increase in RGDP (proxy Economic growth) is brought about by 118% increase in (GFCF) gross fixed capital formation, 114% increase in (TEXPEDU) total expenditure on education, 22% increase in total recurrent expenditure on education (TREXPEDU) and 0.00095% increase in (TLBF), total labour force. R2 shows that 98% systematic variation in Real GDP is caused by variation in the explanatory variables. This indicates that there is, indeed a short and long-run relationship between education, and economic development. The findings have a strong implication on educational policy in Nigeria. The study seems to suggest that a concerted effort should be made by policymakers to enhance educational investment with a focus on human capital development in order to ensure and accelerate inclusive growth that would engender economic development.

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A Spatial Econometrics Analysis of Educational Distribution and Regional Income Disparities in Nigeria

1. Abstract of Emerging Trends in Scientific Research, 2014, Vol.1 DOI: 10.18488/journal.1002/2014.1/1002.1 1st International Conference on Emerging Trends in Scientific Research 15-16 March, 2014 Pearl International Hotel Kuala Lumpur, Malaysia Conference Website: www.pakrdw.com 75 Paper ID: 305/14/1 st ICETSR A Spatial Econometrics Analysis of Educational Distribution and Regional Income Disparities in Nigeria Habibu Mohammed Umar1 --- Russayani Ismail2 --- Lim Hock Eam3 Abstract Understanding the determinants of regional economic disparities is essential to designing an effective policy framework to address regional inequalities and their disruptive potentials. The role of educational attainment in the regional income determination has been widely investigated in the economic literature. So far, less attention has been given to the importance of educational distribution in regional income determination. To contribute in this respect, this paper developed a regional production function model that incorporates education inequality as a determinant of regional income disparity in Nigeria. Using micro data from the recent Living standard measurement survey (LSMS) on Nigeria, we calculate inequality of education using Theil index. The contribution of each region to the overall inequality obtained from the Theil index is considered. Employing a cross sectional spatial econometric approach, we found evidence that more equal distribution of education has significant and positive effects on regional per capita income. Interestingly, education distribution out performs educational attainment in the model. The results also confirm the role of education inequality in accounting for regional income differences in Nigeria. We conclude that investing for equitable distribution in education will be an effective policy to reduce regional disparities in Nigeria as well as an efficient means to promote economic development.

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