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Article
Publication date: 18 January 2013

Justin Doran and Declan Jordan

The purpose of this paper is to analyse income inequality for a sample of 14 European countries and their composite regions using data from the Cambridge Econometrics…

Abstract

Purpose

The purpose of this paper is to analyse income inequality for a sample of 14 European countries and their composite regions using data from the Cambridge Econometrics regional dataset from 1980 to 2009. The purpose of the paper is to provide insight into the dynamics of regional and national cohesion among the EU‐14 countries studied.

Design/methodology/approach

Initially, inequality is decomposed using the Theil coefficient into between and within country inequality to assess the extent to which convergence has occurred. To investigate the underlying causes of the changes in inequality, the Theil coefficient is further decomposed to assess the contribution of productivity and employment‐population ratio differentials to inequality.

Findings

The results indicate that while between‐country inequality has declined, within‐country inequality has increased by approximately 50 percent. Subsequent decomposition indicates that while productivity levels among regions have converged, the employment‐population ratios have diverged substantially driving increasing levels of inequality. This suggests that while EU cohesion policies have reduced productivity inequalities they have had little effect in stimulating convergence of employment‐population ratios across regions.

Research limitations/implications

The paper argues that national priorities, particularly in the context of the current European economic crisis, are likely to hinder European Union level policies to reduce income inequality at a regional level. This may result in further increases in regional inequality among European regions.

Originality/value

This paper's main contribution is to highlight how national convergence can lead to regional divergence being overlooked. The value of the paper is that it provides policy insights, based on empirical evidence, for European cohesion policy.

Details

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

Keywords

Article
Publication date: 30 August 2022

Vivek Jadhav

The existence of the regional Kuznets curve, i.e. an inverted U-shaped relationship between regional disparity and economic development is widely debated and discussed…

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Abstract

Purpose

The existence of the regional Kuznets curve, i.e. an inverted U-shaped relationship between regional disparity and economic development is widely debated and discussed. The bell-shaped curve of the spatial growth process where during the initial phase inequality increases and then reduces is theoretically supported by Myrdal (1957), Hirschman (1958), and Williamson (1965). It becomes important to understand regional Kuznets curve globally. Understanding the relationship between regional disparity and economic development becomes essential for public policy for balanced regional growth.

Design/methodology/approach

Regional Kuznets Curve which is an inverted U-shaped relationship between regional disparity and economic development is not a new phenomenon. Theoretical framework by Myrdal (1957), Hirschman (1958), and Williamson (1965) support the an inverted U-shaped relationship. To understand the relationship between regional disparity and economic development, the authors investigate the regional Kuznets curve by using data for 184 countries and 1765 subnational regions. Using parametric, semi-parametric, and non-parametric, it is found that there exists an inverted U-shaped relationship between regional disparity and economic development. The presence of the regional Kuznets curve is observed. As the theoretical framework suggests, regional inequality increases with income initially and decreases after attaining a certain level of income. This study identifies two stages of divergence-convergence where in the first stage, divergence across regions in a country happens with increasing income and in the later stage, convergence across regions in a country occurs with increasing income.

Findings

Using the parametric approach (panel data analysis), semi-parametric and non-parametric approaches, it is found that there exists a regional Kuznets curve. It is found that there exists an inverted-U relationship between regional inequality and per capita GNI. This suggests that the divergence-convergence passes through two stages. In the first stage, divergence across regions in a country happens with increasing income while in the later stage convergence occurs.

Originality/value

This research work has done three important things which fill the research gap that exists in the literature: (1) constructing the Gini coefficient to measure the regional inequality for 184 countries using 1765 subnational regional data; (2) using a parametric approach (panel data analysis) to understand the regional Kuznets phenomenon and (3) using a semi-parametric approach and non-parametric approach to understand the regional Kuznets phenomenon.

Details

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

Keywords

Book part
Publication date: 30 September 2014

Adelaide P. S. Duarte, Jacques Silber, João Sousa Andrade and Marta C. N. Simões

This paper extends a methodology proposed by Nissanov and Silber (2009) who decomposed the coefficient β used in convergence analysis into three components checking…

Abstract

This paper extends a methodology proposed by Nissanov and Silber (2009) who decomposed the coefficient β used in convergence analysis into three components checking respectively whether there was σ-convergence, whether ‘pure mobility’ (upward or downward income mobility) was lower among the poor and what the extent of ‘residual mobility’ (the third component) was.

The present paper extends this analysis by applying it to the analysis of regional per capita income levels but also to that of within regions inequality and regional welfare levels. The empirical illustration uses Portuguese data on average earnings at the level of NUTS3.

Details

Economic Well-Being and Inequality: Papers from the Fifth ECINEQ Meeting
Type: Book
ISBN: 978-1-78350-556-2

Keywords

Article
Publication date: 20 August 2018

Indra Indra, Suahasil Nazara, Djoni Hartono and Sudarno Sumarto

The purpose of this paper is to investigate the relationships between expenditure inequality and expenditure polarization in Indonesia during the post-reformation era in…

Abstract

Purpose

The purpose of this paper is to investigate the relationships between expenditure inequality and expenditure polarization in Indonesia during the post-reformation era in 2002–2012. It also explores the various dimensions of regional groups; and finds out in which dimension did the expenditure inequality and polarization occur in Indonesia during the period.

Design/methodology/approach

Gini index was employed to measure expenditure inequality and a number of developed polarization measurement was applied to investigate the linkage between inequality and polarization at national levels. It also applied a polarization index based on inequality decomposition to investigate how the polarization occurs in the regional dimension. It covered several groups of regional dimensions; those are rural and urban areas; eastern and western regions, as well as natural resource-rich provinces and non-natural resource-rich provinces.

Findings

This study found that expenditure inequality and polarization in Indonesia have moved in line, showing an increasing trend during the observation period. In the regional context, the greatest rise was in the region with low initial levels of expenditure inequality and polarization. The trends in each of the regional dimension showed a convergent pattern. It also showed that a significant portion of total polarization was attributed to expenditure differences between urban and rural areas rather than the other groups of regions.

Research limitations/implications

The similar upward movement of expenditure inequality and polarization indicates that not only the differences between groups of expenditure are getting larger, but also the identification of the within groups expenditure are getting stronger. Since the high degree of inequality and polarization are closely related to conflict among groups of communities, this finding is a strong message to the policymaker that the development process in Indonesia during 2002–2012 tended to encourage the creation of social instability.

Practical implications

This study provides an evaluation for further development of social economy in Indonesia.

Originality/value

This paper attempts to give an overview of the relationship between expenditure inequality and polarization in Indonesia during 2002–2012. It also tries to reveal in which regional dimension, expenditure inequality and polarization occurred in Indonesia during the mentioned period. The issues have not been examined in previous empirical studies in Indonesia.

Details

International Journal of Social Economics, vol. 45 no. 10
Type: Research Article
ISSN: 0306-8293

Keywords

Book part
Publication date: 24 May 2007

Frederic Carluer

“It should also be noted that the objective of convergence and equal distribution, including across under-performing areas, can hinder efforts to generate growth

Abstract

“It should also be noted that the objective of convergence and equal distribution, including across under-performing areas, can hinder efforts to generate growth. Contrariwise, the objective of competitiveness can exacerbate regional and social inequalities, by targeting efforts on zones of excellence where projects achieve greater returns (dynamic major cities, higher levels of general education, the most advanced projects, infrastructures with the heaviest traffic, and so on). If cohesion policy and the Lisbon Strategy come into conflict, it must be borne in mind that the former, for the moment, is founded on a rather more solid legal foundation than the latter” European Commission (2005, p. 9)Adaptation of Cohesion Policy to the Enlarged Europe and the Lisbon and Gothenburg Objectives.

Details

Managing Conflict in Economic Convergence of Regions in Greater Europe
Type: Book
ISBN: 978-1-84950-451-5

Book part
Publication date: 30 September 2014

Vanesa Jordá, José María Sarabia and Faustino Prieto

This paper aims to estimate the global income distribution during the nineties using limited information. In a first stage, we obtain national income distributions…

Abstract

This paper aims to estimate the global income distribution during the nineties using limited information. In a first stage, we obtain national income distributions considering a model with two parameters. In particular, we propose to use the so-called Lamé distributions, which are curved versions of the Sigh-Maddala and Dagum distributions. The main feature of this family is that they represent parsimonious models which can fit income data adequately with just two parameters and whose Lorenz curves are characterized by only one parameter. In a second stage, global and regional distributions are derived from a finite mixture of these families using population shares. We test the validity of the model, comparing it with other two-parameter families. Our estimates of different inequality measures suggest that global inequality presents a decreasing pattern mainly driven by the fall of the differences across countries during the course of the study period that offsets the increase in disparities within countries.

Details

Economic Well-Being and Inequality: Papers from the Fifth ECINEQ Meeting
Type: Book
ISBN: 978-1-78350-556-2

Keywords

Book part
Publication date: 29 July 2009

Partha Gangopadhyay and Manas Chatterji

In recent years, economics has turned its serious attention to the explaining of conflicts and a peaceful resolution of conflicts. Some interesting and powerful…

Abstract

In recent years, economics has turned its serious attention to the explaining of conflicts and a peaceful resolution of conflicts. Some interesting and powerful microeconomic models have been developed, yet it seems there are gaps that motivate the current research. As our discussion shows below, the existing models are robust in explaining an equilibrium defence spending of a nation in a general equilibrium setting. Yet, there is little that we know about the regional distribution of defence spending that is likely to give rise to serious rent-seeking activities, politicking and consequent economic consequences in terms of regional disparity and inequality. In this work, we posit that defence spending is like a local public good that impacts on a regional, or local, economy. To be more specific, our model suggests that defence spending offers public infrastructure to a regional economy that, in turn, impinges on the costs of production of local firms, which thereby influence the competitive positioning of the regional economy in the national, or global, market. The goal of the work is to explore how the politics of allocation of defence spending can create an equilibrium regional inequality within a nation, which may in turn drive internal conflicts. Since an allocation of defence spending impacts on regional inequality, regional inequality becomes endogenous in our model. We establish an equilibrium inequality in our model that depends on the optimal allocation of defence spending across regions, which is driven by the electoral motive of an incumbent government.

Details

Peace Science: Theory and Cases
Type: Book
ISBN: 978-1-84855-200-5

Article
Publication date: 1 February 2005

Shujie Yao, Zongyi Zhang and Gengfu Feng

Fast growth in China has led to significant improvement in people's living standards and average income. However, it has also brought about a huge rise in inequality. The…

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Abstract

Purpose

Fast growth in China has led to significant improvement in people's living standards and average income. However, it has also brought about a huge rise in inequality. The purpose of this paper is to analyse regional and rural‐urban inequality using a few income and consumption indicators.

Design/methodology/approach

Data are collected from official statistical sources for all the Chinese provinces over 1978‐1995. Both parametric and non‐parametric methods are used to study the inequality between regions and between the rural and urban sub‐populations. The parametric approach is to test whether per capita incomes among provinces converged over time. The non‐parametric approach is the calculation and decomposition of the Gini coefficient by population sub‐group and income source.

Findings

The results show no evidence of growth convergence in per capita GDP, income and expenditure across provinces, but clear evidence of divergence in per capita rural (and urban) incomes and total expenditures. Three‐quarters of inter‐provincial income inequality are explained by inter‐rural/urban inequality. Inter‐provincial inequality explains more than half of rural inequality and less than half of urban inequality in most years.

Originality/value

This paper uses one of the most complicated datasets for the Chinese regions. It studies inequality using different economic indicators. It considers the different dimensions of inequality in China using two different approaches. The results are important for regional development policies.

Details

Journal of Economic Studies, vol. 32 no. 1
Type: Research Article
ISSN: 0144-3585

Keywords

Book part
Publication date: 16 September 2022

Alexey V. Tolmachev, Elena V. Karanina, Yuri A. Kolesnikov and Alla V. Kiseleva

Purpose: This chapter provides a meso-level scientific and economic study aimed at capturing the nature and extent of technological inequalities manifesting themselves in…

Abstract

Purpose: This chapter provides a meso-level scientific and economic study aimed at capturing the nature and extent of technological inequalities manifesting themselves in the regional economy. Regions shall mean economic systems within countries. The authors hypothesize that the regional economy of modern Russia is characterized by pronounced yet moderate technological inequalities at the level of the regional economy.

Design/methodology/approach: A factor analysis of the influence of different factors of state regulation of the regions on technological inequality in Russia is conducted. This makes it possible to develop and substantiate an economic and legal approach to managing conflicts in the sphere of digital development. A bifurcation analysis of wealth and resource dynamics is given.

Findings: In this chapter, the authors examine the basis for state regulation of technological inequalities in Russia’s regions.

Originality/value: The main focus of this chapter is the result of a regression-based factor analysis on the direction of state regulation of the regions on technological inequality in Russia.

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…

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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

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