Poverty, Education, Income Inequality Nexus in South Africa: A Multivariate Approach - Acta Universitatis Sapientiae

Acta Univ. Sapientiae, Economics and Business, 12 (2024) 114–131

DOI: 10.47745/auseb-2024-0006

Abstract. This study investigated the causal relationship between poverty, income inequality, and education in South Africa, using annual data from 1990 to 2020.The main objective of the study was to establish the causal relationship between the three variables to provide insight to policymakers.Two poverty proxies were used, namely household consumption expenditure and infant mortality rate.Using the autoregressive distributed lag (ARDL) approach to cointegration and error correction model (ECM)-based causality analysis, the study found the causality between poverty, income inequality, and education to vary depending on the poverty proxy used.Based on these findings, it is recommended that South Africa should continue with a three-pronged policy focus on poverty, inequality, and quality education.

Keywords: inequality, Human Development Index, household consumption expenditure, autoregressive distributed lag, South Africa, poverty, education

JEL Classification: I24; I32; I38; C32