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The present study aims to determine the existence of simultaneous relationship between economic growth, income inequality, fiscal policy, and total trade of the 13…
The present study aims to determine the existence of simultaneous relationship between economic growth, income inequality, fiscal policy, and total trade of the 13 emerging market economies as a group for the period 1980–2010. After establishing the existence of simultaneity between the above relationships, a simultaneous panel model has been formulated and estimated incorporating the nonlinearity among the variables as suggested by the existing literature. An inverted U-shape relationship is evident between (1) economic growth, income inequality, and total trade in economic growth equation, (2) income inequality, economic growth, and per capita income in income inequality equation, and (3) total trade and economic growth in total trade equation. Thus, the existence of a two-way nonlinear relationship is highlighted between economic growth, income inequality, and total trade. Apart from these nonlinear relationships, positive and significant effect of (1) gross capital formation, inflation, population growth, human capital, fiscal policy, monetary policy, and domestic credit to private sector on economic growth; (2) civil liabilities on income inequality; (3) gross capital formation and inflation on total trade; (4) total trade, population growth of those aged 65 years and above, political system on fiscal policy is highlighted. Also, negative and significant effect of (1) fiscal policy on income inequality and (2) income inequality on fiscal policy is revealed.
Using decomposable measures of inequality, the implications of household structure are investigated by examining inequality between and within household groups based on…
Using decomposable measures of inequality, the implications of household structure are investigated by examining inequality between and within household groups based on the number of exemptions, which correlates with household size, and the filing status, which correlates with the common forms of household structure, i.e. married, single, head of household. Detailed household income data are used to measure income inequality for both pre-tax/transfer and post-tax/transfer definitions of income. These decompositions provide information about the degree of inequality, both before and after taxes and transfers, which is due to household size and filing status. The bootstrap is employed to construct standard errors for the inequality measures and their decompositions, and hypothesis tests are conducted to determine whether the observed changes in the distribution of income are statistically significant.
The size distribution of income, or income inequality, has long been a concern to scholars in many disciplines tor different reasons. Statisticians have approached the distribution of income among individuals as a stochastic process. Economists have sought to explain income distribution by means, of economic and institutional factors. More recently, economists have been interested in the effects of economic growth and government policies on income distribution. Sociologists and political scientists have thought of income inequality as a major source of social revolt or political violence.
This paper investigates the effect of income inequality on health status. A model of health status was specified in which the main variables were income level, income…
This paper investigates the effect of income inequality on health status. A model of health status was specified in which the main variables were income level, income inequality, the level of savings and the level of education. The model was estimated using a panel data set for 44 countries covering six time periods. The results indicate that income inequality (measured by the Gini coefficient) has a significant effect on health status when we control for the levels of income, savings and education. The relationship is consistent regardless of the specification of health status and income. Thus, the study results provide some empirical support for the income inequality hypothesis.
This paper aims to investigate the effects of financial access, financial depth, financial efficiency and financial stability pillars on income inequality and poverty…
This paper aims to investigate the effects of financial access, financial depth, financial efficiency and financial stability pillars on income inequality and poverty among a panel of sub-Saharan African (SSA) countries.
This paper captures cross-sectional dependence among the income groups through the dynamic common correlated effect approach for a data set of 28 selected SSA countries from 2000 to 2017.
This study reveals that the financial development pillars exert positive and significant impacts on income inequality across the income groups. The results show that the effects of the financial development metrics on poverty are different across the income groups. The results also indicate that the pillars improve poverty reduction for low- and lower-middle-income countries. However, there is a minimal effect on poverty reduction in upper-middle-income countries. The differences among these income categories suggest the need for policymakers to account for income levels when prescribing policies that could engender financial development and poverty reduction in the region.
This paper examines the effects of financial development on both income inequality and poverty by using the newly developed World Bank financial development strategic metrics. It captures cross-sectional dependence in the full sample of selected SSA countries and their income categories.
Information and communication technology (ICT) has the potential to address and reduce income inequality. However, since 1980, income inequality in the United States has…
Information and communication technology (ICT) has the potential to address and reduce income inequality. However, since 1980, income inequality in the United States has caused concerns for researchers, policymakers and the public. Entrepreneurs and managers can take advantage of information technologies, while those in the middle and the bottom see fewer benefits. Meanwhile, countries such as Iceland are more capable of using ICT infrastructure to reduce income inequality, which contributes to the well-being of its citizens. This research study explores the relationship between infrastructure diffusion and income inequality through Rogers’s diffusion of innovations theory.
To answer the research questions, the author assessed the data through a series of regression analyses using SPSS. The authors used Power BI software to chart the relationships between ICT infrastructure diffusion and income inequality by country and in the United States by state and region.
The results show diffusion of innovations theory’s tenets do not necessarily hold, because a significant negative relationship exists between infrastructure diffusion and income inequality, especially in countries with emerging economies. In the United States, this relationship significantly differs by region.
This research contributes to research by expanding economic and sociology work to the IS domain, while providing conflicting evidence for diffusion of innovations theory. The research also provides suggestions for practice, such as more focused ICT infrastructure investments and regulations.
The catch word “Globalization” has been defended by advocates for lifting people out of poverty and the inequality in the world. But it has been criticized by opponents…
The catch word “Globalization” has been defended by advocates for lifting people out of poverty and the inequality in the world. But it has been criticized by opponents for failing to solve the problem of poverty, inequality, and for increasingly creating wealth disparity. This raises the question. The fact is that the contemporary world exhibits very high levels of inequality of income and wealth both between countries and within countries. Wealth inequality is more pronounced than that of income inequality across the globe and within-countries. Evidence suggests that rising inequality and wealth disparity arising out of globalization drive is choking off the potential benefits to the poor. In this backdrop, a composite assessment has been made in the present chapter to answer the question “whether globalization with its particular ideology, the market fundamentalism has benefited many and whether the performance on the distributional front has really been impressive.” From facts and evidence, the study finds that inequalities in income and wealth, also in wages have widened in many developed, developing developed, and developing countries. Technological change and globalization are their main sources.
The financial crisis of 2008 and ensuing recession led to falls in earnings in the United Kingdom, not seen since the Great Depression of the 1930s, and it was only in…
The financial crisis of 2008 and ensuing recession led to falls in earnings in the United Kingdom, not seen since the Great Depression of the 1930s, and it was only in 2014 that overall household income returned to its pre-crisis levels. At the same time, according to one official measure, income inequality has actually fallen, although different data indicate no change. This situation follows from several factors, notably the continued growth in pensions, higher earnings of lower-income households as these have worked more since the recovery in 2013, and the continued stagnation of earnings in higher income households (even if very high incomes have continued to pull away from the rest of the population). Incomes of younger workers also remain below their pre-crisis peak. This chapter shows, however, that the picture of poverty and inequality in the United Kingdom is far more complex than suggested by the main measure of income inequality. To this end, it begins by reviewing the definitions of poverty and inequality, in order to provide a broader overview of these pressing but complex social problems. The chapter goes on to examine wealth inequalities, the impact of housing costs on inequality and poverty, and it concludes by presenting recent studies suggesting that Brexit may well lead to future rises in inequality, as higher inflation could well hit lower-income households most.
In the United States, there is little difference in annual income inequality and income mobility between the rural and urban sectors of the economy. This forms a sharp…
In the United States, there is little difference in annual income inequality and income mobility between the rural and urban sectors of the economy. This forms a sharp contrast with China where income inequality is greater and income mobility lower among rural households than among urban households. When incomes are averaged over three years and when adjustments are made for the size and composition of households, income inequality among all households differs little between China and the United States in the 1990s. Moreover when pooling rural households and urban households and when measuring annual income inequality and income mobility of the pooled households, the mobility of incomes of households in the United States differs little from that in China. Social welfare functions are posited that allow for a trade-off between increases in income and increases in income inequality. These suggest strong increases in well-being for urban households in China. The corresponding changes in rural China and in the United States are smaller. Four sets of data on households are drawn on to document these findings.
This paper produces a comprehensive assessment of income redistribution to the working-age population, covering OECD countries over the last two decades. Redistribution is…
This paper produces a comprehensive assessment of income redistribution to the working-age population, covering OECD countries over the last two decades. Redistribution is quantified as the relative reduction in market income inequality achieved by personal income taxes (PIT), employees’ social security contributions, and cash transfers, based on household-level micro-data. A detailed decomposition analysis uncovers the respective roles of size, tax progressivity, and transfer targeting for overall redistribution, the respective role of various categories of transfers for transfer redistribution; as well as redistribution for various income groups. The paper shows a widespread decline in redistribution across the OECD, both on average and in the majority of countries for which data going back to the mid-1990s are available. This was primarily associated with a decline in cash transfer redistribution while PIT played a less important and more heterogeneous role across countries. In turn, the decline in the redistributive effect of cash transfers reflected a decline in their size and in particular by less redistributive insurance transfers. In some countries, this was mitigated by more redistributive assistance transfers but the resulting increase in the targeting of total transfers was not sufficient to prevent transfer redistribution from declining.