Urbanization, Income Inequality and Poverty in Nigeria

Abstract

This study applies the Toda–Yamamoto non-Granger causality approach to examine the relationships among urbanization, economic inequality, and poverty in Nigeria over the period 1981–2024. The primary objective is to determine whether urbanization and income inequality exert causal effects on poverty. The results reveal multiple statistically significant causal linkages among the variables. Although inflation exhibits a relatively weak effect, population growth, population density, migration, income inequality, and unemployment are found to significantly cause poverty. The findings suggest that rapid urbanization in Nigeria has not been accompanied by adequate economic opportunities or infrastructure development, thereby exacerbating poverty levels. Consistent with demographic transition theory, poverty, migration, and inequality contribute to increased population growth. Furthermore, poverty, population growth, population density, and income inequality significantly influence migration patterns, lending empirical support to the push–pull theory of migration. Income inequality is shaped by a combination of socioeconomic and demographic factors, while migration and unemployment emerge as key determinants of inflation.