Determinants Of Income Inequality Research Articles

Energy Resources and Income Inequality: Determinants of Income Inequality in Provincial China

Previous studies have investigated the factors underlying China’s income inequality. However, an important factor—the influence of natural resources—has been overlooked. To reinforce understanding of the factors contributing to income inequality in China, this study examines the role of energy resources in income inequality. This study established a 2005–10 provincial panel data set and adopted a dynamic panel data model with system GMM (generalised method of moments) estimators as empirical strategies. The results demonstrate that provinces that are more dependent on energy resources exhibit higher levels of income inequality and the findings are robust under different measures of income inequality.

Income inequality by method of non-weighted average absolute deviation: case study of Central and Eastern European countries

The presented article uses the method of non-weighted average absolute deviation for expressing income inequality in 11 selected Central and Eastern European Countries. Specifically, the analysis of income inequality is done for Poland, the Czech Republic, the Slovak Republic, Austria, Slovenia, Hungary, Romania, Bulgaria, Latvia, Lithuania and Estonia. Based on the determination of income inequality in the article an analysis is made concerning the development of income inequality, including the subsequent inter-regional comparison in the context of the degree of income inequality in a given human society and economy. The text of this article is organized in 4 parts, after Introduction follows the analytic chapter where, primarily, the method of non-weighted average absolute deviation is explained. The third part contains the empirical analysis of income inequality, and the Conclusion highlights some major conclusions of detailed analysis made in Chapter 3. The analysis of income distribution of 11 European households between years 2005-2013 and its order is made in deciles basing on empirical data from the Statistics on Living Conditions and Welfare published by Eurostat.

Determinants of Income Inequality in the Early Twenty-First Century: A Cross-National Study

This paper uses Solt’s Standardized World Income Inequality Database and attempts to explain variations in Gini coefficients for net household income across 142 developing, transitional and developed societies. The causal model contains three sets of explanatory variables: (1) economic dualism, (2) educational attainment and educational inequality, and (3) political and state influences on income inequality. The most important cause of inequality is still the Kuznets effect: societies at low and high levels of development have less inequality than those at intermediate levels. Population growth increases inequality. Rising labor productivity in the agricultural relative to that in the non-agricultural sector, and being a former Soviet society reduce inequality. Educational attainment has less effect than educational inequality on income inequality. Government income transfers sometimes reduce inequality, but have no effect when all variables are in the model. Finally, liberal democracy has no net effect on inequality

サポートベクターマシンを用いた所得格差の決定要因の実証分析

近年，国家間あるいは各国内の所得格差が幅広い関心を集めている．格差の原因に関する理論的研究はこれまでに数多く行われているが，現実の所得分布を再現する理論モデルは未だ得られていない．所得格差の原因を解明する目的で，所得分配に影響すると考えられる要因を説明変数として回帰分析（OLS）を行い，決定要因を探索した実証的研究が多数報告されている．しかし，これまでは少数の説明変数と線形のOLSのために高い精度のモデルが得られていなかった．本研究では，非線形回帰分析手法の一つであるサポートベクターマシン（SVM）を用いて161カ国のジニ係数（目的変数）と経済，政治，教育，健康，技術分野の57種の説明変数との相関を解析し，感度分析法を用いて57種の変数の中から所得格差の決定要因を探索する実証研究を試みた．その結果，25種の要因によって161カ国のジニ係数を決定係数（R2）0.795という高い精度で再現するモデルを構築した．また，25種の決定要因の中では政治的要因の寄与が最大であり，次いでGDP等の経済的要因と医療費等の健康要因がほぼ同程度の寄与であることが判明した．

Employment transitions and the cycle of income inequality in postindustrial societies

This article presents the claim that the current transition from service to knowledge employment impacts income inequality in a manner that is comparable to the previous transition from agriculture to industry. This contention is tested by an employment transition index that calculates the difference of employment between the higher- and lower-paid sectors of the economy. The calculation of this index is consistent with Kuznets’s view that income inequality increases during the early stages of industrialization due to the presence of a small and higher-wage modern sector that encroaches on the total numbers employed in the large and lower-wage traditional sector. However, income inequality eventually declines with continued industrialization as more workers enter the modern sector of the economy. Results confirm the central argument of this study for a panel of 25 Organisation for Economic Co-operation and Development countries from 1980 to 2008. According to the findings, classical Kuznetsian variables such as sector-dualism are not significant and/or signed in unanticipated directions in their prediction of income inequality. Instead, the employment transition index returns robust negative associations with income inequality and consistently outperforms sector-dualism. Furthermore, knowledge employment returns positive and significant connections with the dependent variable net of the employment transition index. These results confirm that both between- and within-sector employment patterns are key determinants of income inequality.

Beyond “Putin's Russia”: Society and Politics in a Changing Russia

Constructing Grievance: Ethnic Nationalism in Russia's Republics. By Elise Giuliano. Ithaca: Cornell University Press, 2011. 234 pp., $45.00 hardcover (ISBN-13: 978-0-8014-4745-7). Popular Support for an Undemocratic Regime: The Changing Views of Russians. By Richard Rose, William Mishler, Neil Munro. New York: Cambridge University Press, 2011. 206 pp., $30.99 paperback (ISBN-13: 978-0-521-22418-5). The Politics of Inequality in Russia. By Thomas F Remington. New York: Cambridge University Press, 2011. 234 pp., $29.99 paperback (ISBN-13: 978-1-107-42224-7). Much discussion and research on Russian politics justifiably place central importance on Vladimir Putin, his societal and political impact, and his regime's role in a number of domestic and foreign policy developments. After all, he has been the leading figure of the Russian state for more than a decade and has left an indelible imprint on the changing contours of Russian politics and society. Similarly, the 1990s were replete with examinations of Boris Yeltsin building a new Russia from the embers of the collapsed Soviet state. The three books reviewed here examine important and fascinating questions that go beyond the elite intrigues of Russia's national executive and integrate an analysis of societal developments that provoke reflection on political and societal diversity in Russia and its regions. Building on a broad theoretical range of existing scholarship, these works take on important questions and shed valuable light on the factors shaping varying levels of nationalist mobilization, the dynamics of growing public support for a regime that has become less democratic, and the political determinants of income inequality. More than mere case studies of an important country, these books take a cross-sectional, regional, and/or longitudinal approach and are attentive to systematic data collection and analysis, which enhances their explanatory leverage. For some, additional comparative explorations of the applicability of arguments to other country contexts would lend even greater weight to the arguments and possibly would expand the book's readership beyond Russia's specialists and observers. Nonetheless, these books make for thought-provoking reading and provide rich material about important developments in post-Soviet Russian politics. In Constructing Grievance , Elise Giuliano explores the essential and yet often overlooked puzzle concerning the “dog that did not bark,” namely why nationalist mobilization had more mass appeal in some of Russia's ethnically defined republics and resonated less in others. …

DERIVING MACRO POLICY FROM INCOME INEQUALITY DECOMPOSITIONS BY SUBGROUPS: A CAUTIONARY DISCUSSION

Redistributive macro policies widely refer to the evidence provided on disaggregated components of overall income inequality by different social groups. These decompositions help identify the determinants of income inequality and their relative contributions to the overall inequality, yet, deriving policy related statements from the results obtained needs a great caution. This essay raises issues on policy making based on sub-group decompositions of income inequality taking one of the forefront social stratifiers across the globe as an illustrative case. Decomposition results often suggest that the component of income inequality by social subgroups is not as consequential as other sources of inequality because it is often found that the share of within-group inequality is a larger component of overall income inequality compared to the inequality between groups. We develop the argument that such statements can be problematic for at least two reasons: first, we argue that the contributions of within- and between-subgroup inequality components are contextually incommensurable. Secondly, higher within-group inequality often reflects the implicit selection bias that lies within the socially- stratified structure of labor markets.

Consumer markets and national income inequality: A study of 18 advanced capitalist countries

Sociologists have paid scant attention to the possibility that the structure of the macro-economy is an important determinant of income inequality. Although prior research finds negative links between the size of the public sector and income inequality, no study to date considers whether the size of consumer markets has distributional consequences as well. To investigate this possibility, the present study measures the size of national consumer markets with the System of National Accounts used by governments to calculate gross domestic product (GDP). Based on data from 18 advanced capitalist countries over nearly a 40-year period, two-way random effects regression models reveal a strong and positive link between the size of consumer markets and income inequality. This finding is robust to the inclusion of numerous control variables, and to the consideration of endogeneity within the causal relationship. The proposed theoretical explanation centers on ideas developed by Polanyi, and suggests that economic activity in consumer markets creates higher levels of individual differentiation, and hence higher levels of income inequality, than economic activity in other sectors of the economy. The study concludes by highlighting ways future research can advance our theoretical and empirical understanding of this topic.

The Saving-Investment Gap And Income Inequality: Evidence From 16 Countries

Previous studies that analyzed income inequality mostly concentrated on identifying microeconomic determinants such as income, social factors (family structure, employment, or age distribution), or factor endowments; or such macroeconomic determinants as the exchange rate, economic openness or the black market premium. These studies also relied upon cross-section estimates in their assessments. In this paper, we introduce the "saving-investment" gap, which measures whether the need for financing is unmet, as another determinant of income inequality. We then apply time-series techniques in a study of 16 countries. Using the "bounds testing" cointegration method, in which variables in a given model can be stationary, non-stationary, or a combination of the two, we find varying results across countries. While these results highlight the need for further country-specific research, they indicate the benefits that external financing can provide.

Technological change and income distribution in Europe

Abstract.This article provides empirical evidence of the link between technological change and overall income inequality in 14 EU countries. The analysis begins by testing the skill‐biased technological change (SBTC) hypothesis in sectors with different levels of technology intensity. After confirming the skill complementarity of technology and the predominantly skill‐replacing character of investment, the analysis turns to sectoral changes in skilled‐labour demand as a possible determinant of income inequality. It finds a non‐linear relationship between SB TC and inequality in five of the eight sectors considered, suggesting an inverted U‐shaped pattern that can be explained by stages in labour demand and supply adjustments over time.

Microeconomic Determinants of Income Inequality in Rural Pakistan

Inequality matters for poverty reduction. However, it is often unclear what policy could do to change the distribution of income as to date there is little quantitative evidence about the household characteristics that determine the level of income inequality and its changes over time. This paper sets out to identify these determinants by adapting a regression-based inequality decomposition technique and applying it to panel data from rural Pakistan. Land ownership is key to explaining the level of inequality, but not its changes. In contrast, higher education drives changes, but not the level of inequality. Household location affects both, reflecting growing differences in market access across regions.

Kuznets inverted-U hypothesis revisited: a time-series approach using US data

Kuznets' inverted-U hypothesis implies that economic growth worsens income inequality first and improves it later at a higher stage of economic development. In addition to economic growth, other factors such as population growth, resource endowment, price instability, openness, currency devaluation, etc. have been identified as determinants of income inequality. Previous research used cross-sectional data to test not only the Kuznets' hypothesis, but also empirical validity of other factors and provided mixed conclusions. In this article we use time-series data from the US and recent advances in time-series modelling to show that economic growth worsens income inequality in the short-run and improves it in the long-run.

Comment on “Inequality in Japan”

Comment on “Inequality in Japan”

Dimensions and determinants of income inequality in the Nigerian labour market

Dimensions and determinants of income inequality in the Nigerian labour market

The Lottery and Income Inequality in the States*

Objective. Since the early 1970s, income inequality in the United States has increased dramatically. We examine the impact of state lotteries on income inequality in the American states from 1976–1995.Methods. We use cross‐sectional time‐series data to evaluate the effect of lotteries as well as those of other state tax policies, redistributive programs, and demographic factors on income inequality.Results. We find that state lotteries foster income concentration. Ceteris paribus, states with lotteries have higher levels of income inequality than those states without a lottery. We also find that additional demographic and policy factors have an impact on income inequality in the states.Conclusions. One of the most important policy‐oriented determinants of income inequality is the lottery and a significant portion of the increase in income inequality over our two‐decade time period is attributable to the increasing prevalence and popularity of state lotteries.

Income Inequality and Macroeconomic Volatility: An Empirical Investigation

AbstractWe explore the impact of macroeconomic volatility on the distribution of income. Using a cross‐section of developed and developing countries, we find that greater output volatility, defined as the standard deviation of the rate of output growth, is associated with a higher Gini coefficient and income share of the top quintile. The coefficients suggest that a strong effect on inequality resulting from a reduction in volatility: the Gini coefficient of a country like Chile would fall by 6 points if it were to reduce its volatility to the same level as Sweden or Norway. Our results seem not to be driven by the high‐inequality/high‐volatility Latin American countries.

Distribution and Redistribution in Postindustrial Democracies

This article analyzes the processes of distribution and redistribution in postindustrial democracies. The authors combine a pooled time-series data base on welfare state effort and its determinants assembled by Huber, Ragin, and Stephens (1997) with data on income distribution assembled in the Luxembourg Income Survey (IJS) archive. In the case of the LIS data, the authors recalculate the microdata in order to remove the distorting influence of pensioners on pretax, pretransfer income distribution. They examine the determinants of two dependent variables: pretax, pretransfer income inequality and the proportional reduction in inequality from pre- to post—tax and transfer inequality. They test hypotheses derived from power resources theory against alternatives derived from the literature on the development of the welfare state and the determinants of income inequality, The results offer strong support for power resources theory, particularly in the case of reduction in inequality. Union density, unemployment, and percentage of female-headed households were the main determinants of pre—tax and transfer inequality (R2= .64), while leftist government, directly and indirectly through its influence on the size of the welfare state, was found to be by far the strongest determinant of distribution (R2= .81).

On the determinants of inequality in Bosnia and Herzegovina

We provide empirical evidence on the determinants of income inequality in Bosnia and Herzegovina after the civil war. To do this, we use a an ordered probit approach and take advantage of the first post‐war household survey for the country which sheds some light on the influence of regional differences as well as household characteristics on income quintile determination. With respect to the former, we find large income differences between the two entities in the country, the Federation and Republika Srpska. Such income differences are also noticeable inside entities. On the latter, there are some signs that education, experience, and employment, among others, may help reduce the probability of income decline. Our results are robust to changes of specification as shown by applying a formal sensitivity analysis.JEL classification: O15, O10, I30.

Opening a can of worms: the pitfalls of time-series regression analyses of income inequality

This paper argues that time-series regression analysis is of only very limited use for understanding the determinants of income inequality. The argument is based on a combination of results from the time series econometrics literature and several characteristics of inequality itself, principally nonstationarity of the data in most inequality regression models, and the weak theoretical foundations underlying the models. A sample of postwar US data is used to illustrate the problems involved.

The Role of Region-Specific Institutionalized Cultural Characteristics on Income Inequality in the American South: The Case of Georgia’s Plantation Belt

Numerous studies have attempted to determine which factors affect income inequality in a given region. These factors relate to the demographic, economic, educational, and labor force characteristics of the region. One factor that has largely been ignored in the previous literature, however, is the effect of long-established, region-specific institutionalized social and cultural characteristics. By estimating the effect of a county’ s location in Georgia’s Plantation Belt, a region whose historical and economic development differs substantially from the rest of the state, this paper addresses the role that these institutionalized cultural characteristics play in the determination of income inequality in the state of Georgia. The results indicate that while demographic, economic, educational, and labor force characteristics significantly affect income inequality in Georgia, income inequality is greatest in the Plantation Belt counties. In addition, the racial composition of a county has a much weaker effect on income inequality in Plantation Belt counties than in those counties located outside the Plantation Belt.