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ICT, income inequality and economic growth nexus in South Africa

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  • Musakwa, M.T
  • Odhiambo, N.M

Abstract

This study examined the causal relationship between ICT, income inequality and economic growth in South Africa using data from 1990 to 2021. Three measures of ICT were used in the study, namely fixed telephone lines subscription, mobile cellular subscriptions and the proportion of people using the internet to the total population. Employing the autoregressive distributed lag approach, the study found a unidirectional causal flow from income inequality to ICT across all measures of ICT employed. Another unidirectional causal flow from economic growth to ICT was found in the short run when ICT was measured by fixed telephone lines and mobile cellular. When internet access was used as a measure of ICT, a bidirectional causality between internet access and economic growth in the short run and a unidirectional causal flow from internet access to economic growth was confirmed. Across all three measures of ICT, no causal relationship was confirmed between economic growth and income inequality. The study points to the importance of economic growth in increasing ICT access and the crucial role that internet access has on economic growth in South Africa. Policy implications are discussed.

Suggested Citation

  • Musakwa, M.T & Odhiambo, N.M, 2024. "ICT, income inequality and economic growth nexus in South Africa," Working Papers 31545, University of South Africa, Department of Economics.
    • Handle: RePEc:uza:wpaper:31545
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    References listed on IDEAS

    as
    1. Awad, Atif & Albaity, Mohamed, 2022. "ICT and economic growth in Sub-Saharan Africa: Transmission channels and effects," Telecommunications Policy, Elsevier, vol. 46(8).
    2. Khairul Amri & Nazamuddin, 2018. "Is There Causality Relationship Between Economic Growth And Income Inequality?: Panel Data Evidence From Indonesia," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 6(2), pages 8-20.
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    Keywords

    South Africa; inequality; information and technology (ICT); economic growth; autoregressive distributed lag;
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