Income Inequality In Countries Research Articles

The moderation of culture dimensions on the relationships between expectancy-value factors and reading achievement

The expectancy-value theory (EVT) explains the relationship between reading achievement and expectancy-value factors (i.e., self-concept and task value). As an extension of EVT, the situated expectancy-value theory (SEVT) emphasizes the influence of situational context. Adopting a multi-level modeling approach and drawing on Hofstede's (2011) Cultural Dimensions Theory, we investigated the relationship between SEVT factors (i.e., reading enjoyment and self-concept) and reading achievement using the PISA 2018 dataset. We focused on the moderation effects of six cultural dimensions (e.g., collectivism-individualism) on the relationship between reading enjoyment, self-concept, and reading achievement, along with socioeconomics factors (i.e., country income inequality, country affluence) as country-level covariates. Our findings confirm that (1) there is a positive relationship between the expectancy-value factors and reading achievement and (2) reading self-concept but not enjoyment is a stronger predictor of reading achievement in countries that highly value individualism, egalitarianism, and short-term orientation. Besides, reading enjoyment is more strongly linked to reading achievement in wealthy countries. Educational relevance statementThe findings of this study have important implications for teaching and educational policy-making. Since self-concept and enjoyment strongly correlate with reading achievement, the intervention in students' reading enjoyment and self-concept should be an important consideration in reading classes. In addition, the strength of the association between expectancy-value factors and reading achievement depends on the cultural and socioeconomic characteristics. While it is difficult to change a country's cultural norms and socioeconomic situation fundamentally, reforms can be made to create a school and family environment that affords the motivation “seeds” to grow. Particularly, policymakers need to consider how to promote egalitarianism, respect personal goal pursuit and autonomy, emphasize both long-term and short-term goals during teaching and learning. Finally, in developing countries, boosting education investment can provide additional resources to foster the literacy development of students with a passion for reading, ultimately enhancing their reading achievement.

Can Piketty’s Interest Rate – Growth Rate Framework Explain Increasing Income Inequality in Pakistan?

Inequality in income distribution has important ramifications for economic growth, development, and social justice (see Atkinson (2000), Piketty (2013), Milanovic (2016), etc.). Piketty (2013) explains the phenomena of growing income inequality in high-income countries by comparing the interest rates (r) and growth rates (g) over time. The crux of the argument is that since the upper income groups generate a significantly greater proportion of their income from investments as compared to lower income groups (due to higher savings rate compared to lower income group), interest rates performing better than the national income growth rates in the high-income countries in the post-cold war era (r-g) explain growing income inequality in these countries. This paper examines the use of this methodology to explain income inequality in Pakistan. It compares the evolution of income of the top 20 percent of Pakistan’s population with the income of the bottom 20 percent, using Piketty’s lens of interest rate growth rate dynamics. Empirical results show that r-g methodology does not capture the income distribution dynamics of Pakistan. Upper income group appears to be negatively affected by increases in interest rates as compared to the lower income group. Prices, international trade, taxes, and financial development tend to be the leading reasons for reducing the impact of r and g framework to explain the income distribution. This paper makes novel contributions to the methodology and implications of Piketty’s framework for studying income inequality in small, open, less developed countries like Pakistan.

From Recession to Pandemic

Abstract Embarking on an exploration of socio-economic disparities within OECD countries over two decades, this research investigates the effects of the Great Recession and the COVID-19 pandemic on income distribution, labor market dynamics, and health outcomes. Using Exploratory Data Analysis of time-series and mixed-effects models, the study reveals a context characterized by intensifying inequalities, with variations reflecting the unique socio-economic structures of individual countries. It uncovers a pronounced increase in income inequality in countries including Lithuania, Luxembourg, Italy, and the United States, alongside shifts in labor market conditions, with the United States being particularly notable. Furthermore, the analysis highlights a widening of health disparities, evidenced by a decline in life expectancy in countries like the United States, Poland, and Slovakia, and a slowdown in reducing infant mortality rates. The use of mixed-effects models elucidates the role of country-specific factors in shaping these inequalities, revealing a complex interplay of influences that highlight the varied impacts of the pandemic across the OECD. This study not only charts the evolving contours of socio-economic inequalities but also enhances the understanding of global crises’ effects on developed economies.

Globalization, welfare, and inequality: Evidence from transoceanic market integration, 1815–1913

Abstract This article contributes to the growing historical literature on the ‘first globalization’ (1815–1913) and income inequality in countries that exported agricultural products. International market integration is expected to increase the demand for exports and therefore their prices. We estimate the effects of increased prices from international market integration on national welfare and income inequality between and within regions in three major exporters of agricultural products—British India, Colonial Indonesia, and the United States—using the prices of eleven key primary commodities. Market integration significantly increased aggregate welfare, but the gains were unevenly distributed. Producing regions gained up to nearly 6% of their GDP. Since the regions that made most welfare gains were also the poorest in their countries, market integration mitigated inequality between regions. Within the southern United States and Java, plantation owners obtained most gains, causing a substantial increase in inequality between persons.

How Does Financial Inclusion Affect Economic Growth and Income Inequality?

Financial inclusion is an important element in creating inclusive economic growth. The availability of easy access to public services can facilitate all levels of society. This study focuses on analyzing the effect of financial inclusion on economic growth and income inequality in countries based on their income categories. The research object is 440 observations with secondary data using cross-section and time-series data for 11 years, 2010 - 2020, and using objects from 40 countries in the world based on their income categories. This research uses panel method regression analysis. The results of panel data regression show that financial inclusion affects economic growth and income inequality when estimated with complementary variables, inflation, and the rule of law. In its effect on economic growth, financial inclusion has proven to be influential in the categories of lower-middle-income and high-income countries. Meanwhile, in terms of its impact on income inequality, financial inclusion is proven to affect the lower-middle-income and upper-middle-income categories of countries. The results of this study become a consideration for countries based on their income categories to increase financial inclusion so that policies can be achieved to improve people's welfare through financial inclusion

Can an equal world reduce problematic social media use? Evidence from the Health Behavior in School-aged Children study in 43 countries

ABSTRACT Research on the social determinants of Problematic Social Media Use (PSMU) among adolescents is scant and focused on proximal contexts and interpersonal relationships. This study examines the relation of PSMU with economic inequality, measured at country, school and individual levels. It also evaluated the moderating role of family and peer support in these associations. The 2017/18 Health Behavior in School-aged Children (HBSC) study measured PSMU in 179,049 adolescents aged 11-, 13- and 15-year-olds in 43 countries and sub-regions of Belgium (Flanders and Wallonia) and the United Kingdom (England, Scotland, and Wales). Associations between inequality and PSMU were tested using multilevel logistic regression analyis. Results showed that adolescents who were relatively more deprived than their schoolmates and attended more economically unequal schools had a higher likelihood of reporting PSMU. In addition, school wealth inequality was more closely related to PSMU among adolescents with lower levels of peer support. A similar effect of country income inequality was found, but only in adolescents who reported low family support. Our findings expand the existing literature on the detrimental impact of inequalities in different social contexts on adolescent wellbeing by showing the role of inequalities in the engagement in PSMU.

The effects of asset prices on income inequality: Redistribution policy does matter

Income inequality in some developed countries has been steadily increasing over the past two decades, contrasting Kuznets' hypothesis that income inequality will improve after a certain income level. During that same period, asset prices rose significantly, blamed for increases in inequality. Are rising asset prices really the cause of rising inequality? Using the data of 32 developed countries across 1980–2018, this research empirically reveals that a country's stance toward redistribution significantly determines whether asset prices affect income inequality. The results indicate that an increase in house prices significantly increases income inequality in countries with weak income redistribution policies, while asset prices do not affect income distribution in countries with strong redistribution policies. An improvement in income inequality does not occur spontaneously but requires active government intervention.

Flood impact on income inequality in the Itapocu River basin, Brazil

AbstractDisasters worldwide tend to affect the poorest more severely and increase inequality. Brazil is one of the countries with high income‐inequality rates and has unplanned urbanization issues and an extensive disaster risk profile with little knowledge on how those disasters affect people's welfare. Thus, disasters often hit the poorest hardest, increasing the country's income inequality and poverty rates. This study proposes a method to assess the impact of floods on households spatially based on their income levels by conducting flood analysis and income analysis. The method is applied to the Itapocu River basin (IRB) located in Santa Catarina State, Brazil. The flood is assessed by conducting rainfall analysis and hydrological simulation and generating flood inundation maps. The income is evaluated using downloaded 2010 census data and a dasymetric approach. Flood and income information is combined to analyze flood‐impacted households by income level and flood return period. The results confirm the initial assumption that flood events in the IRB are more likely to affect the lowest‐income households rather than the highest‐income levels, thus, increasing the income inequality.

Is There Any Relationship Between the Number of COVID-19 Tests by Country with the Income Inequality of Countries? A Comparison with Income Inequality Metrics.

OBJECTIVECoronavirus diseases 2019 test numbers vary from country to country. The present study aims to investigate whether there is a relationship between the number of coronavirus diseases 2019 tests by country with the income inequality of countries.MATERIAL AND METHODSThe association between the number of coronavirus diseases 2019 tests and income inequality metrics was evaluated in 197 countries. Income inequality metrics consisted of the gross domestic product per capita, Gini index, the P80/P20 ratio, human development index ranking, and poverty rate. The share of the tests that gave positive results (positive rate) and fatality rates was calculated by countries.ResultsThere was a strong positive correlation between the number of coronavirus diseases 2019 tests per million people and the number of coronavirus diseases 2019 patients per million people (rho = 0.697, P < .001). A significant correlation was observed between the number of coronavirus diseases 2019 tests and all income inequality metrics (P < .001). The strongest positive correlation with the number of coronavirus diseases 2019 tests was between gross domestic product per capita (rho = 0.775), while the strongest negative correlation with the number of coronavirus diseases 2019 tests was between human development index ranking (rho = −0.836). The multiple regression analysis showed that age (P = .01), gross domestic product per capita (P < .001), and human development index ranking were independent factors affecting the number of coronavirus diseases 2019 tests per million people (adjusted R 2 = 0.301). The fatality rate was associated with the number of coronavirus diseases 2019 tests (P = .01).ConclusionIncome inequalities in countries are associated with the number of coronavirus diseases 2019 tests. For this reason, many deaths from coronavirus diseases 2019 may have gone overlooked in countries with poor-income inequality metrics.

Inequality, Privatization, and Democratic Institutions in Developing Countries

Privatization of state-owned enterprises in low- and middle-income countries is regarded as an indispensable first step for the consolidation of national accounts, the development of financial markets, and the improvement of firms’ efficiency. However, privatizations may also have a relevant distributional impact, particularly in developing countries, where proceedings from privatization may be a sizable resource for redistribution. This article is a first attempt to investigate the relationship between privatization and income inequality, focusing on the role of democratic institutions. We find that an increase in privatization proceeds is correlated with a reduction in income inequality in countries where representative political institutions are mature.

Interrelations between Income Inequality and Sustainable Economic Growth: Contradictions of Empirical Research and New Results

The idea that high levels of economic inequality negatively affect the rate and sustainability of economic growth is quite popular in the scientific literature. Therefore, it is usually proposed to take some regulative measures to reduce economic inequality in order to boost economic growth. Should the thesis be considered as a populist slogan or a scientifically proven fact? This article analyzes the results of 22 empirical studies on the relationship between economic inequality and economic growth conducted during the period of 1917–2018. We used meta-analysis to examine and systematize the results of previous empirical studies. The literature review and the analysis of the results from previous studies mainly indicate a negative relationship between economic inequality and economic growth (59% of the previous empirical research). The research gap is that on average these studies are rather controversial to each other and we cannot say that we understand these relationships correctly. To answer the questions concerning the interrelations between income inequality and sustainable economic growth, we made our own empirical research. To do this we used a qualitative pairwise correlation comparison method and analyzed panel data of 39 countries for the period of 1980–2019. The correlation between income inequality and sustainable economic growth was evaluated basing on the Gini index (GI) and Gross Domestic Product (GDP). Our calculations and analysis show that on average, in approximately 57.8% of moments in the period between 1980–2018, this correlation was positive in our sample of countries. The novelty of our study is that we show in detail how income inequality and economic growth are interconnected for each particular country and on average for the whole sample of countries. In addition, we used the inequality transparency index to adjust our calculations for data quality. Three hypotheses were tested in the study. Only one of them was confirmed by our research. The level of income inequality determines the direction of its impact on economic growth. An increase in income inequality in countries with low levels of inequality in most cases boosts economic growth and vice versa. Additionally, we received partial confirmation of our other hypothesis and found out that the correlation between economic growth and income inequality is definitely more negative for countries with low income and more positive in countries with high income per capita.

Trade, education, and income inequality

ABSTRACT This paper examines the relationship between countries’ bilateral trade with the United States that is not due to gravity (non-gravity trade) and the distribution of income within countries. In countries where only a small share of the population are educated, an increase in non-gravity trade is associated with a significant increase in income inequality. As education of the population increases the correlation between non-gravity trade and income inequality becomes smaller. Non-gravity trade has no significant effect on income inequality in countries that are world leaders in education.

Epidemics, pandemics and income inequality

The novel coronavirus is part of a series of infectious disease outbreaks that include: Ebola, Avian influenza, Middle East respiratory syndrome coronavirus, and Influenza A. This paper addresses the question of how do these epidemics and pandemics affect income inequality in countries around the world during the first two decades of this century. To achieve its objective, the paper develops a model that indicates a positive association between these health crises and income inequality. To empirically test our theoretical predictions, the paper explores the effect on the Gini coefficient of a dummy variable that indicates the occurrence of an epidemic or a pandemic in a country in a given year and the number of deaths per 100,000. To properly address potential endogeneity, we implement a Three-Stage-Least Squares technique. The estimation shows that the number of deaths per 100,000 population variable has a statistically significant positive effect on the Gini coefficient, especially when we incorporate COVID-19 data. This suggests that not only the occurrence, but also the health consequences of COVID-19 have a significant and economically important effect on income inequality.Background: The purpose of the study is to examine the effect of epidemics and pandemics on income inequality. This has important implications as the outcome of this study can guide policymakers into implementing policies that can mitigate the economic consequences of these health crises.Methods: The study is a cross country analysis using fixed effects estimation. To address potential endogeneity and determine causality, the paper uses the Three-Stage-Least-Squares estimation.Results: The paper finds that the number of epidemic deaths per 100,000 population variable has a statistically significant positive effect on the Gini coefficient, especially when we incorporate COVID-19 data.Conclusions: The paper finds that it is not only the occurrence of an epidemic, captured by the epidemics dummy variable, but also the health consequences, captured by the number of deaths per 100,000 population, that have a significant effect on income inequality. This is especially the case when we incorporate COVID-19 in our analysis.Trial registration: Not Applicable.

Analysis of the Relationship between Financial Technology Development and Income Distribution

China's economy has achieved rapid development, and its per capita income has officially entered the ranks of upper-middle-income countries. However, it should be noted that while my country's economy is growing rapidly, the people do not enjoy the fruits of development equally, and the gap between the rich and the poor in my country still remains. In a higher position. Whether the gap between the rich and the poor can be maintained within a reasonable range is related to whether we can adhere to the concept of shared development and lead the people to gradually achieve common prosperity. At present, the development of financial technology is booming and changing with each passing day. Relying on artificial intelligence, blockchain, cloud computing and big data technology has greatly improved the benefits of financial services, that is, reducing costs and improving efficiency. The development of financial technology does take into account the marginal long-tail distribution. So, can the development of financial technology improve my country's income inequality and narrow the gap between the rich and the poor? This paper selects China's panel data from 2008 to 2020, and empirically tests the linear relationship between fintech and income inequality within the sample interval. With the development of fintech, income inequality will worsen. This conclusion is consistent with the current development of fintech in my country. It is basically consistent with the reality of income disparity, and is closely related to the fact that my country's fintech is in its infancy and that with the vigorous development of the financial industry, financial assets have exacerbated income inequality.

The relationship between foreign aid and income inequality and the role of corruption

In this paper, we reassess the relationship between foreign aid and income inequality. The existing literature provides mixed evidence at best on the direction, magnitude, and significance of the relationship between foreign aid and income inequality. We contribute to the literature on this topic by differentiating between types of foreign aid namely: economic, social, production, multi‐sector, and humanitarian aid to determine which types of foreign aid reduce income inequality in recipient countries after accounting for endogeneity bias using generalized method of moments estimation method. We also study the role of control of corruption in the aid‐inequality relationship. The study uses panel data comprising of 78 recipient countries for the last 14 years. We found that an increase in total aid increases income inequality, however, when we differentiate among types of aid, we found that the economic sector, production sector, and humanitarian aid decrease income inequality, multi‐sector increases income inequality while social aid does not have any impact on income inequality. Moreover, we found that foreign aid has a negative relationship with income inequality when its interaction with corruption is included in the model. This result holds for all types of foreign aid. Negative interactions between foreign aid and corruption show that foreign aid reduces income inequality in countries where control for corruption is high.

Does Income (Re)distribution Matter for Subjective Well‐being? Evidence from Cross‐country Panel Data

ObjectivesThis study empirically investigates the effects of income inequality and income redistribution policy on country‐level subjective well‐being.MethodsThe paper uses panel data of 134 countries from 2005 to 2017. The fixed effect model with time and country dummies is employed.ResultsWe find that a higher inequality level significantly deteriorates happiness in a country with high income inequality, while it does not affect happiness in a country with a low level of inequality. In addition, stronger redistributive policies improve subjective well‐being of countries that have high income inequality, while the policies do not have significant effect on subjective well‐being in countries with relatively low‐income inequality. Furthermore, this paper finds that people are affected by relative levels of income inequality as income grows: people in developed countries may have higher standard for income equality compared with those in developing countries.ConclusionsThe policy implication of this paper is that an active income redistribution policy can improve the country level subjective well‐being if a country's income inequality level is higher than its peer group, regardless of whether it is a developed or developing country.

Gelişmiş ve Gelişmekte Olan Ülkelerde Gelir Eşitsizliği Yakınsama Analizi

Even though income inequality one of the most commonly analyzed topics in economics, there are few studies aiming to examine the convergence in income inequality. By using a balanced panel of 98 countries over the period of 1995 and 2015, we provide empirical evidences of the beta convergence that explains why there is a decrease in inequality levels in countries that have high inequality levels at the start of the study period and an increase in inequality levels for countries that have low inequality levels at the first year of the sample period. The results of the study support the convergence hypothesis in inequality and provide some explanation of the reasons and the tendencies of income inequalities in countries. Thus, it is possible to derive important implications from the results of the study which contributes the convergence/divergence debate.

A Regression Analysis of the Carbon Footprint of Megacities

Urbanization and climate change are two major issues that humanity faces in the 21st century. Megacities are large urban agglomerations with more than 10 million inhabitants that emerged in the 20th century. The world’s top 100 economies include many North and South American megacities, such as New York, Los Angeles, Mexico City, Sao Paulo and Buenos Aires; European cities such as London and Paris; and Asian cities such as Tokyo, Osaka, Seoul, Beijing and Mumbai. This paper addresses a dearth of megacity energy metabolism models in the literature. Cross-sectional data for 36 global megacities were collected from many literature and Internet sources. Variables included megacity name, country and region; population; area; population density; (per capita) GDP; income inequality measures; (per capita) energy consumption; household electricity prices; (per capita) carbon and ecological footprint; degree days; average urban heat island intensity; and temperature and precipitation. A descriptive comparison of the characteristics of megacities was followed by ordinary least squares with heteroskedasticity-robust standard errors that were used to estimate four alternative multiple regression models. The per-capita carbon footprint of megacities was positively associated with the megacity GDP per capita, and the megacity ecological footprint; and negatively associated with country income inequality, a low-income country dummy, the country household electricity price, and the megacity annual precipitation. Targeted policies are needed, but more policy autonomy should be left to megacities. Collecting longitudinal data for megacities is very challenging but should be a next step to overcome misspecification and bias issues that plague cross-sectional approaches.

The Role of Institutional Conditions in the Impact of Economic Growth on Income Inequality

Analysis of the factors determining economic growth rates, development, and economic welfare has found that structures and institutions have important effects on economic performance. They are the main cause of the differences between countries. In this regard, the present study examines the role of institutional conditions in the impact of economic growth on income inequality in countries with middle and high per capita income during 2004-2017. This study was conducted by the panel threshold method. To measure the institutional quality, the general index of good governance was used, which was obtained using the weighted average of the six governance indices of the World Bank. This model's threshold value is -0.6928, which shows that when the good governance index crosses this threshold and institutional quality improves, economic growth reduces income inequality to a greater extent.

Tax reforms and income inequality in former Yugoslav countries: Escaping the avant-garde neoliberalism in the income tax policy

After the breakup of former Yugoslavia Croatia, Serbia and Slovenia followed different income tax reform trajectories that could explain currently different levels of income inequality in these countries. Our paper analyzes redistributive effects of introducing progressive tax systems, like the ones currently implemented in Slovenia and Croatia, in the Serbian context. Using microsimulation modeling and Survey on Income and Living Conditions data for 2017 our results suggest that implementation of both Croatian and Slovenian tax system would yield lower levels of income inequality and poverty if applied in Serbia. Slovenian system achieves larger decrease in inequality due to higher tax burden on the top incomes and brings significant increase in tax revenues. Croatian tax schedule achieves stronger decrease in poverty as more generous personal allowance exempt higher portions of low incomes from labour taxes.