Abstract
The degree of income differentiation depends on many factors, including the level of regional economic development, production structure and industrial specialization. In this paper, we assess the impact of the industrial specialization of Russian regions on income inequality measured by the Gini coefficient. Based on the regional data over the period 2005 to 2018, we build an econometric model applying the Arellano-Bover / Blundell-Bond estimation method. We use shares of the main industries in gross regional product to describe production structure of regions. The modelling results show that the classic Kuznets curve is not empirically supported for the regions of Russia. Besides, we find that the larger the share of mining, manufacturing, construction, trade and financial sector in GRP, the higher the inequality in the region, while the share of agriculture does not affect it significantly.
Highlights
In recent decades, the combination of rapid economic development at the national and regional levels and growing social inequality has attracted a growing public attention
Among the Sustainable Development Goals defined by the United Nations (UN) in 2015 are measures aimed at reducing poverty and inequality and creating strong institutions
The world economy has achieved an impressive success in economic development
Summary
The combination of rapid economic development at the national and regional levels and growing social inequality has attracted a growing public attention. High income differentiation among population remains a significant problem, leading to adverse social consequences. These consequences include a decrease in social mobility and in capital inflows, an increase in crime, and to social and political instability [1]. Russia shows a high level of inequality in comparison with the European countries. Relative to the BRICS countries and the United States, Russia has a relatively lower income differentiation [2]. We test the hypothesis of the Kuznets curve on the influence of the regional economic development on inequality
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