Economic growth and disparity issues in income and education: a causal enquiry on Asean countries

One of the prime motivations of economic research is the issue of causality. Not only does it offer fascinating theoretical views on economic variables, providing proof of causal linkages also serves as useful foundations for policy actions. This paper attempts to offer significant contribution to the literature by examining causal linkages between economic growth, income inequality and education inequality. Data for several ASEAN countries are compiled in this study and are examined using Toda-Yamamoto Granger Causality test. Several lag specifications were considered and the appropriate model was selected based upon various diagnostic measures. The results reveal a unidirectional causality from income inequality to economic growth. Test procedures fail to find any evidence of causality between economic growth and education inequality as well as between education inequality and income inequality despite various empirical indications in other studies suggesting some form of connection among the variables.