Poverty, Inequality and Inclusive Growth Dynamics: Evidence from Nigerias Panel Household Surveys

Using updated Nigerias micro panel household surveys, we estimate the impact of human capital endowments on household economic well-being controlling for exogenous circumstance-related factors over which households have little or no control. We found that education and health endowments have significant causal impact on the well-being of the households. More so, education has significant causal impact on the income of households below the bottom 40% (specifically the households at the bottom 25%). Inequalities at the national level are mainly determined by rural-urban and northern-southern inequalities. These observed income inequalities in rural-urban sectors and northern-southern geopolitical zones are mainly propelled by differences in education and health endowments of the households. However, the equalization of human capital endowments in terms of education and health is indeed growth-enhancing. We suggest, therefore, that policies capable of eliminating inequalities in access to schooling and health will enable households at the bottom of the distribution to enjoy better economic well-being.