Determinant of Income Inequality in Ethiopia: Regression Based Inequality Decomposition
Widening inequality has significant implications for growth and macroeconomic stability; it can concentrate political and decision making power in the hands of a few, lead to a suboptimal use of human resources, cause investment-reducing political and economic instability, and raise crisis risk. Despite the decline in national poverty across all measures inequality at national level in Ethiopia appeared to increase over the course of time. This studies focusing on investigating the determinant of inequality in Ethiopia by using the raw data collected from central Stastical authority based on the regression decomposition of field’s methodology. The empirical result tells the variables like years of education, age of the house hold head, residency of the head, agricultural sector and household married contribute to reduce the income inequality. The employment, the occupation and the race are also having a great contribution for the inequality of income. The policy maker should design a new way that able to benefit the female other than affirmative like reducing the passing point in exam. But giving more credit access like enat bank it’s possible to avoid the income variation between the female household head and male household head. The government should be fair interims of distributing resource among the region without any racial discrimination and should give equal infrastructure to all regions.
Determinant of Income Inequality in Ethiopia: Regression Based Inequality Decomposition, European Business & Management.
Vol. 5, No. 3,
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