International Journal of Social Science & Economic Research
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Title:
Income Inequality and Household Saving in Kenya

Authors:
Karugu G. Joakim and Isaac Kimunio Phd

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Karugu G. Joakim1 and Isaac Kimunio Phd2
1,2. Department of Applied Economics, School of Economics, Kenyatta University, Nairobi Kenya

MLA 8
Joakim, Karugu G., and Isaac Kimunio. "Income Inequality and Household Saving in Kenya." Int. j. of Social Science and Economic Research, vol. 9, no. 5, May 2024, pp. 1502-1517, doi.org/10.46609/IJSSER.2024.v09i05.012. Accessed May 2024.
APA 6
Joakim, K., & Kimunio, I. (2024, May). Income Inequality and Household Saving in Kenya. Int. j. of Social Science and Economic Research, 9(5), 1502-1517. Retrieved from https://doi.org/10.46609/IJSSER.2024.v09i05.012
Chicago
Joakim, Karugu G., and Isaac Kimunio. "Income Inequality and Household Saving in Kenya." Int. j. of Social Science and Economic Research 9, no. 5 (May 2024), 1502-1517. Accessed May, 2024. https://doi.org/10.46609/IJSSER.2024.v09i05.012.

References
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ABSTRACT:
Household saving in a country is a critical source of funding to its investments especially in a developing economy like Kenya. Household saving emerges as an integral part towards national saving level in that country. Currently, Kenya’s national saving stands at 12% of its Gross Domestic Product and over the past three decades, Kenya has shown a declining trend in gross domestic savings since it was at 23% of Gross Domestic Product in the early 1990s and dropped to 12% in the early 2020s. This declining saving rate could be explained by the country’s level of income inequality which also has detrimental effects on economic growth as well as the poverty reducing effects of a growing economy. Kenya has been having a declining rate of income inequality portrayed by the declining Gini indices. This study proposed to investigate the effects of income inequality on household saving rate in Kenya. This study used cross-sectional financial data collected from Fin Access Household Survey of 2021. Data analysis involved descriptive statistics, diagnostic tests, and probit regression analysis. The study findings were that income inequality had a negative effect on the likelihood of a household to save. This study recommends the government to intervene in addressing the issue of high income inequality through tailormade interventions like progressive taxation, minimum wage and labor policies, and equal access to quality education.

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