Determinants of Income Inequality Sources among Women in Rural Oyo State, Nigeria

Abstract

This paper applies the regression-based inequality decomposition approach to explore determinants of income inequality sources among women in rural Oyo State, Nigeria. A four-stage sampling procedure was used in the collection of primary data with purposive selection of two agricultural development programme zones in Oyo State of Nigeria. 150 respondents were eventually used for the study. Structured questionnaires and interview schedules were used to collect data. Data were analyzed using descriptive statistics and Shapley decomposition approach. Age and household size of women were 35.5±1.06 years and 8.0±0.59 persons, respectively. Most respondents (88.0%) were married and 43.3% were farmers with income of N24,196.76±11,897.90 per month. Sources that largely explain inequality were primary occupation (0.5551), farm size (0.2523) and household assets (0.0766) and the relative contributions of these factors sum up to 80%. Total inequality computed by the Gini index was 0.2206 and it implies that the contribution of the predicted residual term to income inequality in this case was 22.06%.The marginal contribution of the estimated income sources of the weighted mean with no negative values from level 1 to 12 were primary occupation, educational level, workers per household, number of assets and location with weighted marginal contribution of 0.0125, 0.0120, 0.0105, 0.0071 and 0.0053 respectively. Narrowing the gap between those at the top and the bottom of income distribution will reduce inequality in the households and the nation at large and that is the more reason this study needs attention because within group components overwhelmingly accounted for inequality compared to the between group components. The role of spatial inequality and policies that encourage entrepreneurship training and non-formal education for women in rural areas would be inequality reducing, and would tend to be more effective if additional policy instruments are used to target other sources of measured income inequality.