The Determinates of Income Inequality in Urban Ethiopia: The Case of Woldia Town

Abstract

This study examines the determinants of income inequality in woldia town, one of the zonal town in Amhara region in Ethiopia.. For the successful accomplishment of the study, primary data obtained from surveying the households of the town is applied. The inequality situation in this town is analyzed using both Lorenz curve and gini coefficient and income distribution is proved to be highly unequal even higher than the national average with a Lorenz curve far away from the equality line and the gini coefficient of 0.39. In addition to this, the OLS estimation coefficient declared the existence of direct positive effect of level of education on income but inverse relationship between income and dependency ratio. Moreover income of male headed households is greater than that of female headed and those household heads hired in public sectors earn income less than the private sector employees.

Keywords: Gini coefficient, Income inequality, Lorenz curve, Woldia Town

DOI: 10.7176/JESD/10-13-05

Publication date:July 31^st 2019