Income Inequality Among Households In Kenya: Does The Gender Of The Household Head Matter?

Abstract

Income inequality has been on the rise and its reduction has been made a key goal for governments and international development agencies across the World. A key contributor to income inequality is gender inequality which has a direct relationship to income inequality; that is, an increase in gender inequality leads to an increase in income inequality. Gender inequality has also been found to have negative effects on economic growth and due to its collective negative effects, its reduction is also a key goal globally. In Africa, both gender and income inequality are high and in addition to this, the poverty level is also high. Understanding the dynamics of income inequality and the gender is important since approximately 50 percent of households in Africa are headed by a woman and gender gaps do not work in their favour. To determine the level of income inequality in Kenya and to determine whether the gender of the household head has an influence on it, this study uses the Gini Coefficient and Shapley-Sharrock Decomposition for estimation. The findings show that the inequality among Kenyan household is low at 39 percent; gender has a positive but small contribution to income inequality; and education level of the household head, location of a household and household size have high contributions to income inequality in Kenya at 14 percent, 12 percent and 7 percent respectively; and income inequality is more pronounced in households living in the urban areas households and in favour of male headed households. This then calls upon welfare policy makers and implementers to ensure that policies that encourage lower contribution of gender to inequality are maintained and that policies that encourage rural development with the aim of reducing rural urban migration are put in place. In addition there is need for equitable investment and distribution in education. All these welfare policies will aim at the reduction of income inequality among Kenyan households.