DETERMINANT OF IN

This study examined the determinants of income inequality in Nigeria for the period 1981 to 2023. For this purpose, four determinants of income inequality, namely government expenditure, access to credit, inflation rate and financial development were considered in this study using the ARDL bound testing procedure. The results showed that the four variables (government expenditure, access to credit, inflation rate and financial development) exert insignificant negative effect on income inequality in Nigeria in the short-run. We conclude that the selected variables are not key factors that influence income inequality in Nigeria within the studied period. To achieve more equitable distribution of income, the study recommends that implementation of policies that deepen the financial system and increase spending by .policy makers should focus on expenditure that affects the low income earners in order to reduce income inequality in Nigeria. Also, relaxing borrowing constraints is advocated so that the people with less income and small firms can make use of private credit, which helps them to increase their earning opportunities and creating additional employment for the local community. Furthermore, government should embark on expansionary fiscal and monetary policies to boost aggregate output as a measure to curb inflation and also implement policies that will deepen the financial system in Nigeria in order to improve income distribution and thus reduces inequality.