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Book part
Publication date: 26 November 2019

Dipyaman Pal, Chandrima Chakraborty and Arpita Ghose

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…

Abstract

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.

Details

The Gains and Pains of Financial Integration and Trade Liberalization
Type: Book
ISBN: 978-1-83867-004-7

Keywords

Book part
Publication date: 20 May 2003

Jeffrey A Mills and Sourushe Zandvakili

Using decomposable measures of inequality, the implications of household structure are investigated by examining inequality between and within household groups based on the number…

Abstract

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.

Details

Fiscal Policy, Inequality and Welfare
Type: Book
ISBN: 978-1-84950-212-2

Article
Publication date: 2 February 2024

Pattanaporn Chatjuthamard, Pandej Chintrakarn, Pornsit Jiraporn, Weerapong Kitiwong and Sirithida Chaivisuttangkun

Exploiting a novel measure of hostile takeover exposure primarily based on the staggered adoption of state legislations, we explore a crucial, albeit largely overlooked, aspect of…

Abstract

Purpose

Exploiting a novel measure of hostile takeover exposure primarily based on the staggered adoption of state legislations, we explore a crucial, albeit largely overlooked, aspect of corporate social responsibility (CSR). In particular, we investigate CSR inequality, which is the inequality across different CSR categories. Higher inequality suggests a less balanced, more lopsided, CSR policy.

Design/methodology/approach

In addition to the standard regression analysis, we perform several robustness checks including propensity score matching, entropy balancing and an instrumental-variable analysis.

Findings

Our results show that more takeover exposure exacerbates CSR inequality. Specifically, a rise in takeover vulnerability by one standard deviation results in an increase in CSR inequality by 4.53–5.40%. The findings support the managerial myopia hypothesis, where myopic managers promote some CSR activities that are useful to them in the short run more than others, leading to higher CSR inequality.

Originality/value

Our study is the first to exploit a unique measure of takeover vulnerability to investigate the impact of takeover threats on CSR inequality, which is an important aspect of CSR that is largely overlooked in the literature. We aptly fill this void in the literature.

Details

Managerial Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 25 September 2009

Rati Ram

The purpose of this paper is to extend the existing literature on cross‐country disparities by providing measures of cross‐country inequality in human development index (HDI) and…

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Abstract

Purpose

The purpose of this paper is to extend the existing literature on cross‐country disparities by providing measures of cross‐country inequality in human development index (HDI) and real income per capita over the 30‐year period 1975‐2004.

Design/methodology/approach

A well‐recommended inequality index is applied to the data.

Findings

Ten points are noted: first, HDI inequality declined over the period; second, the pace of decline slowed somewhat since 1990; third, magnitude of HDI inequality has been quite small; fourth, inequality in gross domestic product per capita also shows a declining pattern over the period; fifth, there is very high correlation between HDI and per capita income; sixth, despite the high correlation, magnitudes of inequalities in the two variables are dramatically different; seventh, therefore, even very high correlation may not be interpreted as implying similar inequalities in the variables; eighth, cross‐country inequalities in various regions show huge differences; ninth, negative trend in inequalities over the period shows high statistical significance; and tenth, t‐tests for equality of means do not pick up well even huge differences in regional inequalities, suggesting need for considerable caution in the use of such tests.

Originality/value

The primary scientific significance of the work lies in providing the measures of cross‐country inequality in HDI over the 30‐year period; showing dramatically different inequalities in HDI and income despite very high correlation between the two variables; and indicating cross‐country inequalities in eight different regional groups and also across regions.

Details

Journal of Economic Studies, vol. 36 no. 5
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 1 February 1984

KANG H. PARK

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…

Abstract

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.

Details

Studies in Economics and Finance, vol. 8 no. 2
Type: Research Article
ISSN: 1086-7376

Article
Publication date: 18 January 2013

Minh Quang Dao

The aim of this paper is to extend a theoretical model due to Ljungqvist and data from a sample of 19 developing economies to empirically test it.

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Abstract

Purpose

The aim of this paper is to extend a theoretical model due to Ljungqvist and data from a sample of 19 developing economies to empirically test it.

Design/methodology/approach

Data for all variables are from the 2005 Human Development Report and the 2006 World Development Report. The author applies the least‐squares estimation technique in a multivariate linear regression.

Findings

Based on data from the World Bank and the United Nations Development Programme, the paper uses a sample of 19 developing economies and finds that cross‐country variations in income/consumption inequality may be explained by inequality of investment in human capital as measured by inequalities in child health as well as inequality in education and by inequality in the distribution of land as measured by the land Gini index.

Practical implications

Assuming a population consisting of skilled laborers, unskilled laborers, educators/health care personnel, and farmers, the paper shows that starting from an initial distribution of assets and in the absence of a perfect capital market along with human capital exhibiting increasing returns it is possible to have persistent inequality in the distribution of income or consumption. Regression results also are consistent with the theoretical implication of the model as the extent of inequality in land distribution and in access to education as well as inequalities in child health do linearly influence income or consumption inequality as measured by the ratio of the share of income or consumption accounted for by the richest quintile to that of the poorest quintile. As a result, if governments in developing countries aim to reduce inequality, they need to implement programs designed to reduce inequalities in child health by allowing children from the poorest of the poor to get fully immunized, which in turn would lead to a reduction in infant and child mortality and in education by providing low‐income families with means so that their children have better access to education. Government land policies, on the other hand, that succeed in reducing inequality in land distribution in developing countries, may be beneficial in terms of lessening income/expenditure inequality. Finally, while the present model does not test for the impact that improving capital markets would have, it stands to reason that improving capital markets could also have an impact on decreasing inequality.

Originality/value

In this paper the author uses a model due to Ljungqvist to show that individuals are relatively wealthy because they either own a fixed input such as land or they are able to invest in human capital, which in turn allow them to earn sufficient rent or labor income to remain wealthy. On the other hand, poor people either do not own land or are not capable of investing in human capital, and, as a result, earn low incomes and remain poor. This joint causation of factor endowment or human capital investment and income helps explain income distribution. Using data from the United Nations Development Programme and the World Bank for a sample of 19 developing economies, it is found that cross‐country variations in income/consumption inequality may be explained by inequality of investment in human capital as measured by inequalities in child health as well as well as inequality in education and by inequality in the distribution of land as measured by the land Gini index. These results will help governments in developing countries identify areas that need to be improved upon in order to reduce income/consumption inequality.

Details

Journal of Economic Studies, vol. 40 no. 1
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 15 January 2024

Edmond Berisha, Rangan Gupta and Orkideh Gharehgozli

The primary focus of this study is to examine the distributional consequences of the widespread increase in prices. The fundamental question the study aims to address is whether…

Abstract

Purpose

The primary focus of this study is to examine the distributional consequences of the widespread increase in prices. The fundamental question the study aims to address is whether the dynamics of income distribution due to higher inflation differ in the short term compared to the long run.

Design/methodology/approach

The authors estimated a panel-data model (fixed effects) using inequality and inflation data available at a high frequency, i.e. on a quarterly basis for over 30 years, and found evidence that inflation causes rapid swings in income distribution.

Findings

The authors’ contribution to the literature lies in providing evidence that inflation rapidly causes swings in income distribution, even after controlling for the state of the economy. The authors also demonstrate that the magnitude and direction of the effect of inflation on income inequality depend on whether the initial inflation rate is below or above the Federal Reserve’s target of 2%.

Originality/value

To the best of the authors’ knowledge, the authors are the first to emphasize that the targets set by central banks can drive the strength and direction of the relationship between inflation and income inequality.

Details

Journal of Economic Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0144-3585

Keywords

Book part
Publication date: 31 July 2023

Célia Bouchet and Mathéa Boudinet

This chapter draws on biographical interviews to analyze identity-based interpretations of inequalities by disabled people in France, as these understandings are formed and…

Abstract

This chapter draws on biographical interviews to analyze identity-based interpretations of inequalities by disabled people in France, as these understandings are formed and transformed over the course of their lives. We combined the material from two different studies to create a corpus of 65 life stories from working-age people with contrasting impairments in terms of type, degree, and onset, as well as various profiles in terms of gender, race, and class. When talking about the inequalities they face, respondents commonly made use of identity labels (gender, class, race, disability), among those available in their micro and macro environments. They usually presented these categories as separate and cumulative, and only a few upper-class disabled women developed reflections in line with an intersectional model. This fragmentation of identity categories translated into the framing of each inequality encountered through a single lens. Respondents mentioned race, class, or gender mainly when evoking topics and contexts that the public debate highlights as problematic, while their references to disability covered a variety of disadvantages. Although the interview situation might have fueled this framing, we also showed that certain earlier socialization processes led people to believe that their disability was the source of the inequalities they encountered. Lastly, we identified three turning points that encourage shifts in the interpretation of inequalities; these are the availability of a new label to qualify one's experience, a competing identity-based interpretation for a mechanism, and access to a different, intersectional model of inequality.

Details

Disabilities and the Life Course
Type: Book
ISBN: 978-1-80455-202-5

Keywords

Book part
Publication date: 22 August 2018

Christian Stohr

This chapter does three things. First, it estimates regional gross domestic product (GDP) for three different geographical levels in Switzerland (97 micro regions, 16 labor market…

Abstract

This chapter does three things. First, it estimates regional gross domestic product (GDP) for three different geographical levels in Switzerland (97 micro regions, 16 labor market basins, and 3 large regions). Second, it analyzes the evolution of regional inequality relying on a heuristic model inspired by Williamson (1965), which features an initial growth impulse in one or several core regions and subsequent diffusion. Third, it uses index number theory to decompose regional inequality into three different effects: sectoral structure, productivity, and comparative advantage.

The results can be summarized as follows: As a consequence of the existence of multiple core regions, Swiss regional inequality has been comparatively low at higher geographical levels. Spatial diffusion of economic growth occurred across different parts of the country and within different labor market regions. This resulted in a bell-shaped evolution of regional inequality at the micro regional level and convergence at higher geographical levels. In early and in late stages of the development process, productivity differentials were the main drivers of inequality, whereas economic structure was determinant between 1888 and 1941. The poorest regions suffered from comparative disadvantage, that is, they were specialized in the vary sector (agriculture), where their relative productivity was comparatively lowest.

Book part
Publication date: 27 August 2016

Carlos Gradín

We investigate the reasons why income inequality is so high in Spain in the EU context. We first show that the differential in inequality with Germany and other countries is…

Abstract

We investigate the reasons why income inequality is so high in Spain in the EU context. We first show that the differential in inequality with Germany and other countries is driven by inequality among households who participate in the labor market. Then, we conduct an analysis of different household income aggregates. We also decompose the inter-country gap in inequality into characteristics and coefficients effects using regressions of the Recentered Influence Function for the Gini index. Our results show that the higher inequality observed in Spain is largely associated with lower employment rates, higher incidence of self-employment, lower attained education, as well as the recent increase in the immigration of economically active households. However, the prevalence of extended families in Spain contributes to reducing inequality by diversifying income sources, with retirement pensions playing an important role. Finally, by comparing the situations in 2008 and 2012, we separate the direct effects of the Great Recession on employment and unemployment benefits, from other more permanent factors (such as the weak redistributive effect of taxes and family or housing allowances, or the roles of education and the extended family).

Details

Income Inequality Around the World
Type: Book
ISBN: 978-1-78560-943-5

Keywords

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