Income inequality: The effects of public education expenditure and information and communications technology in sub-Saharan Africa

Abstract

Background: As nations globally strive to meet the United Nations Sustainable Development Goal (SDG) 10, which underscores the reduction of inequality, there is an increasing need to harness the power of education and information and communications technology (ICT) to achieve this aim. Therefore, this study is motivated by this rationale.

Aim: The synergistic effect of government spending on education and ICT on income inequality in sub-Saharan Africa (SSA) in the long run.

Setting: Panel data for 30 SSA countries from 1990 to 2022 are used.

Method: This research used the Fully Modified Ordinary Least Square (FMOLS) technique, which provides long-run estimates, to achieve the aim of the article.

Results: The FMOLS results reveal that public education expenditure increases income inequality while its squared expenditure reduces it in the long run. However, over time, ICT diminishes inequality. Notably, the combined effect of public education spending and ICT strengthens the effect of public education expenditure on income inequality in SSA in the long term.

Conclusion: In summary, with the incorporation of additional control variables in the analyses, it suggests that SSA’s governments, along with policymakers, have the opportunity to achieve income inequality reduction by strategically making use of public education spending and ICT.

Contribution: This article adds significant value to the literature by demonstrating the effect of public education spending and ICT on income inequality in SSA (characterised by higher level of income inequality). To mitigate concerns regarding endogeneity, this article uses FMOLS.