Determinants Of Income Inequality Research Articles

Income Inequality in Mountain Areas: The Case of Agroforestry Farming Systems in Uluguru Mountains, Tanzania

Land degradation due to use of unsustainable agricultural practices has affected many communities in rural mountain areas rendering them to be more vulnerable to income poverty and inequality. In this case, agroforestry systems promise to offer great solutions as they can be developed in unfavourable conditions where other production systems would either rapidly degrade the land or otherwise would not be possible. However, little is known whether agroforestry can address issues of income inequality in mountain areas. Hence, we conducted a study to investigate the nature and determinants of income inequality in Uluguru Mountains, Tanzania. Specifically, we used the cross-sectional research design and we calculated the income percentile shares, Gini coefficients and the coefficient of variation (CV), to pinpoint the nature of income inequality in the study area. The determinants of income inequality were analysed using the step by step multiple linear model. The results of analysis suggested prevalence of income inequality. Crop production was the main source of income in the agroforestry systems of the study area. Earnings from crops and timber were decreasing income-inequality amongst smallholder farmers. Our disaggregated analysis showed that off-farm income was also decreasing income-inequality for farmers with farmlands located close to homestead, for female-headed households, for farmers who did not access extension services, and those who were members of community-based financial institutions. Estimated incomes increased with household assets, size of farmland, and age of household head. However, the same decreased with household size. We found gender disparity to be one of the key issues that need attention in formulating future policies to reduce inequality. We recommend promotion of livelihood diversification as well as the designing and implementation of tailor-made training and farm financing mechanism to help the less resource-endowed farmers in mountain areas to raise their economic portfolios and social status and combat income poverty and inequality.

Still the Lands of Equality? On the Heterogeneity of Individual Factor Income Shares in the Nordics

As far as standard measures of income inequality are concerned, the Nordic countries rank among the most equal economies in the world. This paper studies whether and how this picture changes when the focus is on inequality of income composition, meaning the heterogeneity in individuals' factor income shares. We highlight the structural change taking place in all the Nordic countries since the early 1990s, with rising inequality in composition of individual incomes due mostly to a shift in capital incomes towards the top of the distribution. We link this result to changes in taxation of factor incomes, by highlighting the role played by the introduction of Dual Income Taxation reforms in the 1990s throughout the Nordic countries. Our estimates of the degree of income composition inequality allow a descriptive analysis of the role of functional distribution as a determinant of personal income inequality in the Nordics. We show that for Denmark in the period 2009 - 2013, Finland 1990 - 2007, and Norway 1991 - 2005, rising capital shares of income contributed to changes in personal income inequality, whilst for Sweden the evidence leads to disregard the capital share as a determinant of income inequality.

Review Article on Determinant of Income Inequality: An Evidence Based Approach

Income inequality is a situation in which there are differences in income and wealth within the country, region, small group of society and individuals. According to bigesten the main reason is that the distribution of income is the final result of the entire economic process. The classical period was characterized by focusing only on the functional distribution. For Marx, the distribution between capital and labour and thereby between capitalists and workers played a decisive role: it is the basis of the capitalist system of production. For both Ricardo and Marx, sources of income flows relate exactly to their social classes; i.e. landlords receive rent, capitalists receive profits and workers receive wages. According to Marx (1887), the value of each commodity is determined by the labour contained in it, measured in time. Since labour power is also regarded as a commodity, its value is determined by the time necessary for its reproduction and therefore rests on a subsistence level that enables the worker to maintain his work. Workers only possess their labour power and the capitalists own the means of production. Marx’s conclude that the source of income inequality is capitalist system.

Persistence and determinants of income inequality: The Brazilian case

AbstractLatin America, which is a region known for its high and persistent income inequality levels, experienced a significant decline in income inequality since the second half of the 1990s. Brazil is a particularly interesting case in Latin America. While the country presented notable economic growth and improvements in income distribution in the early 2000s, Brazil continues to experience high levels of income inequality in comparison with other Latin American or advanced economies. This research contributes to the literature by examining the key drivers of income distribution and the degree of persistence of income inequality among Brazilian states. This research also improves upon previous works by using more recent and comprehensive data and addressing concerns regarding heterogeneity and endogeneity by using the system GMM estimation method. Our findings show that income inequality is highly persistent across Brazilian states and that government policies including income transfer programs made important contributions to reduce income inequality in Brazil. This study also shows that the decline in labor income ratios between different ethnic groups and the increase of the share of formal jobs in the labor market contributed to reduce income inequality.

Bayesian inference for the finite gamma mixture model of income distribution

The income distribution model has provided an important aspect of economic inequality analysis. The determination of income inequality can be assisted by modeling a probability distribution of income which can be modeled by both parametric and nonparametric method. In the parametric perspective, the finite mixture distributions can perform a data-driven capability to model this income pattern of distributions which have particularly long-tailed, right-skewed and multimodal characteristics. The gamma distribution which has been widely used for estimating income distribution is used to develop the finite gamma mixture model which means the gamma distribution in each mixture component of the model. Bayesian approach pairs up with the Markov Chain Monte Carlo (MCMC) which has a valid inference without depending on normality asymptotic condition is used to estimate this finite mixture model. In this paper, the household income which was constructed based on the Indonesian Family Life Survey (IFLS) 2014-2015 data was utilized to show the work of the Bayesian inference performance through MCMC algorithm in estimating the parameter of the finite gamma mixture model. The goodness-of-fit comparisons of proposed finite gamma mixture models were made based on the widely applicable information criteria (WAIC).

Determinants of Income Inequality Among Cooperative Farmers in Anambra State

Determinants of Income Inequality Among Cooperative Farmers in Anambra State

The Determinants of Income Inequality in Europe: Do Trade Liberalisation and Financial Liberalisation Matter?

This study provides evidences about the determinants of income inequality in 31 sampled countries of Europe. Prior to implementing the empirical research, the study identifies the factors, which according to theories, affects the level of income inequality. Income inequality is now an issue bordering not only the developing countries, but also the emerging and the developed ones as well. The results obtained from the estimated model enabled to draw some interesting conclusions. Firstly, quality of the rule of law determines income inequality, secondly, trade liberalisation conditions income, thirdly, level of financial development determines inequality of income and finally, education level in emerging countries decreases level of income inequality, while it increases the level of inequality in the developed countries of the continent.

THE DETERMINANTS OF INCOME INEQUALITY: THE ROLE OF EDUCATION

The economics literature reports mixed evidence on the importance of education as a determinant of income inequality. In this document we shed light on the debate by testing this relationship for a sample of developing and developed countries from 1990 to 2014. We control for country specific characteristics including trade openness, unemployment, foreign direct investment, and the share of elderly population. The results of robust panel data estimations unequivocally find that education is negatively and significantly associated with income inequality.

Determinant of Income Inequality in Ethiopia: Regression Based Inequality Decomposition

Widening inequality has significant implications for growth and macroeconomic stability; it can concentrate political and decision making power in the hands of a few, lead to a suboptimal use of human resources, cause investment-reducing political and economic instability, and raise crisis risk. Despite the decline in national poverty across all measures inequality at national level in Ethiopia appeared to increase over the course of time. This studies focusing on investigating the determinant of inequality in Ethiopia by using the raw data collected from central Stastical authority based on the regression decomposition of field’s methodology. The empirical result tells the variables like years of education, age of the house hold head, residency of the head, agricultural sector and household married contribute to reduce the income inequality. The employment, the occupation and the race are also having a great contribution for the inequality of income. The policy maker should design a new way that able to benefit the female other than affirmative like reducing the passing point in exam. But giving more credit access like enat bank it’s possible to avoid the income variation between the female household head and male household head. The government should be fair interims of distributing resource among the region without any racial discrimination and should give equal infrastructure to all regions.

Does Clientelism Affect Income Inequality? Evidence from Panel Data

This paper studies the determinants of income inequality in a panel of countries to provide empirical evidence to the relationship between income inequality and clientelism. Using different panel data techniques, especially group mean fully modified OLS estimator, and also allowing for control variables, cross-sectional heterogeneity and cross-sectional dependence, we find that in the long run, clientelism exerts a significant negative effect on income equality. The overall results of the study have implications for fiscal management strategies and political regime choice.

Political Determinants of Income Inequality in Emerging Democracies by Takeshi Kawanaka and Yasushi Hazama, Singapore, Springer, 2016, ix + 112 pp.

Political Determinants of Income Inequality in Emerging Democracies by Takeshi Kawanaka and Yasushi Hazama, Singapore, Springer, 2016, ix + 112 pp.

Institutions, Models of Capitalism and Inequality in Income Distribution: An Empirical Investigation

AbstractThe article analyses the role of institutions in the determination of income inequality in a sample of OECD countries. Basing on the seminal approach by Amable, the article discusses the theoretical definition of model of capitalism. The basic idea is that each model of capitalism is defined by the cobweb of complementary relationships established among different institutions. Using a set of statistical indicators of the operation of institutions in two different years, 1995 and 2010, the empirical analysis points out five models of capitalism and exhibits how their composition has changed in this lapse of 15 years. In the following sections of the article, we investigate the role played by the model of capitalism in the determination of income distribution, measured through a standard Gini index. After controlling for a set of variables, the econometric evidence shows that different models of capitalism present significantly different levels of income inequality.

Special Issue Indonesia Development Forum 2017: Fighting Inequality for Better Growth

Special Issue Indonesia Development Forum 2017: Fighting Inequality for Better Growth

The determinants of income inequality in OECD countries

The objective of this paper is to identify the determinants of the increase in income inequality that OECD countries have experienced over the past two decades. My hypothesis is that along with the financialisation of economies that has taken place since 1990, inequality increased because labour flexibility intensified, labour market institutions weakened as trade unions lost power, and public social spending started to retrench and did not compensate for the vulnerabilities created by the globalisation process. Using data from 25 high-income OECD countries from 1990 to 2013, I empirically evaluate this hypothesis. My results clearly suggest that the increase in inequality over the past two decades is caused by an increase in financialisation, a deepening of labour flexibility, the weakening of trade unions and the retrenchment of the welfare state.

Determinant of income inequality in Indonesia

This study examines whether changing economic structure, social conditions, and financialization are responsible for increased income inequality in Indonesia. By employing panel data of 32 provinces in Indonesia that spans from 2007 to 2013, it finds that structural change affects income inequality, increased share of finance reduces inequality, which is against the financialization hypothesis, and social conditions have expected effects on income inequality. While an increased share of both agriculture and service sectors tends to reduce inequality, an increased share of manufacture sector has no effect on inequality. This study finds that falling poverty increases inequality, implying that policy to reduce poverty might not be neutral for inequality and instead cannot prevent it from increasing. Since the higher the college participation rate the higher income inequality tends to be, it does not automatically imply that in order to reduce inequality we need to reduce the number of people who go to college. It might be the case that the college participation rate has not reached a turning point, below which its increase increases inequality, but beyond which its increases reduces inequality.

Urban Inclusiveness and Income Inequality in China

The issue of income inequality is exacerbating when China experiences the rapid economic growth during the past few decades. This paper argues that urban inclusiveness is one of the determinants of income inequality in Chinese cities, because the Hukou system restricts public service to Hukou-registered workers only. The impact of urban inclusiveness on income inequality and the underlying mechanism are discovered by examining how Hukou restriction affects income gap between skilled and unskilled workers and how the preferences on public services and urban inclusiveness vary across skilled and unskilled workers. With the 2005 Inter-Census Population Survey, we find skilled workers care more about public services and urban inclusiveness, so skilled workers are relatively scarce in exclusive cities, who hence can enjoy a higher skill premium, leading to a higher income inequality in exclusive cities.

Takeshi Kawanaka and Yasushi Hazama , Political Determinants of Income Inequality in Emerging Democracies, Springer, 2016

Takeshi Kawanaka and Yasushi Hazama , Political Determinants of Income Inequality in Emerging Democracies, Springer, 2016

Calculation and decomposition of income inequality in low- and middle-income countries: a survey data analysis

ABSTRACTThis article estimates income inequality in a sample of four low- and middle-income (LMI) countries namely; Albania, Nepal, Tajikistan and Tanzania using the household survey data – Nepal Living Standard Measurement Survey Second. First, we estimate the income generation function for each country and calculate the income inequality using Gini index (GI). Second, we decompose the income Gini into the determinants of income generation functions. Based on the decomposition result, socio-economic factors are the most important determinants of income inequality followed by geographic factors. Demographic factors have the least effect on income inequality in all four countries. Third, we propose a new method to quantify the effect of change in each covariate of income generation function on income Gini. That allows us to quantify the effects of change in specific policy such as increase in investment in schooling or public health to specific group of the population in society on income inequality. A carefully chosen, integrated policy can significantly reduce inequality in all four countries under study.

DESIGUALDADE DE RENDA NAS MICRORREGIÕES DO VALE DO JEQUITINHONHA – MINAS GERAIS

O presente trabalho estudou os fatores determinantes da desigualdade de renda nas microrregiões do Vale do Jequitinhonha e, baseando-se em diferentes medidas de desigualdade, no teste da hipótese do U-invertido de Kuznets e, utilizando-se a metodologia de dados de painel, verificou-se que a região apresenta restrições importantes corroboradas pela verificação da hipótese de Kuznets-Oshima. Foi verificado, também, que a relação entre que os diferentes setores estariam em diferentes estágios da função U-invertido. Portanto, políticas que vislumbrem a redução de disparidades regionais devem levar em conta a diversidade e os estágios de desenvolvimento dos municípios da região.

HUMAN CAPITAL AND REGIONAL DEVELOPMENT IN BAHIA STATE: A SPATIAL ANALYSIS BETWEEN 2000 AND 2010.

O presente estudo tem como objetivo analisar o desenvolvimento regional do estado da Bahia entre os anos 2000 a 2010, relacionando o capital humano como um dos condicionantes do desenvolvimento do estado. Para tanto, o trabalho utiliza como metodologia a