Inequality In Income Distribution Research Articles

World Analysis of the Determinants of the Inequality in Health. Is the Measurement of Inequality Important?

This essay has a double aim. On the one hand, to identify what are the determinants in the inequality in health. On the other hand, to estimate to what extent the inequality indicator used is important. To do this, we use a cross-sectional model for 176 countries. The achieved results allow concluding that the choice of the inequality measurement is a key element in this type of studies. Also, inequality in income distribution, the weight of the rural population and capitalism make inequality in health increase.

The effect of finance on inequality in Sub-Saharan Africa: avoidable CO2 emissions thresholds.

There is a glaring concern of income inequality in the light of the post-2015 global development agenda of Sustainable Development Goals (SDGs), especially for countries that are in the south of the Sahara. There are also concerns over the present and future consequences of ecological degradation on development outcomes in Sub-Saharan Africa (SSA). This study provides carbon dioxide (CO2) emissions thresholds that should be avoided in the nexus between financial development and income inequality in a panel of 39 countries in SSA over the period 2004-2014. Quantile regressions are used as an empirical strategy. The following findings are established. Financial development unconditionally decreases income inequality with an increasing negative magnitude, while the interactions between financial development and CO2 emissions have the opposite effect with an increasing positive magnitude. The underlying nexuses are significant exclusively in the median and top quantiles of the income inequality distribution. CO2 emission thresholds that should not be exceeded for financial development to reduce income inequality continuouslyare 0.222, 0.200, and 0.166 (metric tons per capita) for the median, the 75th quantile, and the 90th quantile of the income inequality distribution, respectively. Policy implications are discussed with particular relevance to Sustainable Development Goals (SDGs).

Having it all, for all: Child-care subsidies and income distribution reconciled

We study the design of child-care policies when redistribution matters. Traditional mothers provide some informal child care, whereas career mothers purchase full time formal care. The sorting of women across career paths is endogenous and shaped by a social norm about gender roles in the family. Via this social norm traditional mothers’ informal child care imposes an externality on career mothers, so that the market outcome is inefficient. Informal care is too large and the group of career mothers is too small so that inefficiency and gender inequality go hand in hand.In a first-best world redistribution across couples and efficiency are separable. Redistribution is performed via lump-sum transfers and taxes which are designed to equalize utilities across all couples. The efficient allocation of child care is obtained by subsidizing formal care at a Pigouvian rate.However, in a second-best setting, a trade-off between efficiency and redistribution emerges. The optimal uniform subsidy is lower than the “Pigouvian” level. Conversely,under a nonlinear policy the first-best “Pigouvian” rule for the (marginal) subsidy on informal care is reestablished. While the share of high career mothers continues to be distorted downward for incentive reasons, this policy is effective in reconciling the objectives of reducing the child care related inefficiency and achieving a more equal income distribution across couples. Our results continue to hold when the norm is defined within the mothers’ social group, rather than being based on the entire population.

Estimating long-run income inequality from mixed tabular data: Empirical evidence from Norway, 1875–2017

Most evidence on the long-run evolution of income inequality is restricted to top income shares. While this evidence is relevant and important for studying the concentration of economic power, it is incomplete as an informational basis for analysing inequality in the income distribution as a whole. This paper proposes a non-parametric approach for estimating inequality in the overall distribution of income on the basis of tabular data from different sources, some in a highly aggregated form. The proposed approach is applied to Norway, for which rich historical data exist. We find evidence of very high income inequality from the late nineteenth century until the eve of World War II, followed by a rapid equalization until the 1950s. Income inequality remained low during the post-war period but has increased steadily since the 1980s. Estimates of a measure of affluence demonstrate that overall inequality has largely been governed by changes in the top half of the distribution and in the ratio between the mean incomes of the lower and upper halves of the population.

Expansion in Education and Its Impact on Income Inequality: Cross-sectional Evidence from India

Generally, inequalities of any kind are undesirable and the often mentioned income inequality in particular is a manifestation of inequality in other capability domains. Given the adverse implication of income inequality upon the economic and political environments, many would agree that having a less skewed distribution of income is preferable to a highly unequal one. Among various capabilities, education is seen as a potentially powerful income equalizer. The policy of equal access to education is supported, when there is an interest in equalizing income distribution. In this background, the present paper makes an attempt to examine the association between educational expansion and income distribution using cross-sectional data from India. This exercise is carried out independently for rural and urban sector. During the course of analysis, an attempt is made to examine the relationship between the mean and inequality in per capita income. The empirical results confirm the U-shaped relation between the mean and inequality in per capita income for rural sector. But for urban sector, it is found to be linear and positive. The analysis did not find any significant association between the levels of schooling and income inequality in rural sector. However, in urban sector, income inequality is found to be positively related to the share of graduates in the work force.

Trend of income inequality in Asia and effects of education

This study considers how education and globalization affect income inequality in Asia, with the unbalanced panel data. The evidence supports the validity of Kuznets inverted-U hypothesis for the connection between the income level and income inequality. However, when more variables are integrated into the model, the consistency of inverse U-shaped curve becomes weaker. The empirical results suggest that educational variables are highly influential in affecting income distribution. Our analysis indicates that a higher level of education achieved by the population aged 15 and over has improved income distribution in Asia, while educational inequality, measured by the educational Gini, has a negative effect on income distribution. Higher levels of globalization are correlated with higher levels of income inequality, while freedom, either political or economic, has marginal effects on the level of inequity in income distribution.
 Key words: Education inequality, globalisation, income inequality

Inequality and Social Rank: Income Increases Buy More Life Satisfaction in More Equal Countries.

How do income and income inequality combine to influence subjective well-being? We examined the relation between income and life satisfaction in different societies, and found large effects of income inequality within a society on the relationship between individuals’ incomes and their life satisfaction. The income–satisfaction gradient is steeper in countries with more equal income distributions, such that the positive effect of a 10% increase in income on life satisfaction is more than twice as large in a country with low income inequality as it is in a country with high income inequality. These findings are predicted by an income rank hypothesis according to which life satisfaction is derived from social rank. A fixed increment in income confers a greater increment in social position in a more equal society. Income inequality may influence people’s preferences, such that in unequal countries people’s life satisfaction is determined more strongly by their income.

Modified Lorenz Curve and Its Computation

The Lorenz curve is generally used to find out the inequality of income distribution. Mathematically a standard form of the Lorenz curve can be modified with the aim of simplicity of its symmetric analysis and calculation of the Gini coefficient that usually accompanies it. One way to modify the shape of the Lorenz curve without losing its characteristics but is simple in the analysis of geometric shapes is through a transformation (rotation). To be efficient and effective in computing and analyzing a Lorenz curve it is necessary to consider using computer software. In this article, in addition to describing the development of the concept of using transformations (rotations) of the standard Lorenz curve in an easy-to-do form, the symmetric analysis is also described by computational techniques using Mathematica® software. From the results of the application of the development of the concept of the Lorenz curve which is carried out on a data gives a simpler picture of the computational process with relatively similar computational results.

Environmental Inequality and Economic Valuation

I study how the economic value of a heterogeneously distributed environmental public good depends on how the endowment with this good and income are distributed. I find that the effect of environmental inequality on the societal willingness to pay (WTP) for the environmental good is determined both by its substitutability and by the correlation of its provision with income. Specifically, environmental inequality decreases societal WTP for substitutes, but this effect is reversed if the environmental good is a complement or distributed strongly in favour of richer households. Moreover, I show that richer households living in places where environmental good endowment is high increases (decreases) societal WTP if and only if the environmental good is a substitute for (complement to) consumption goods. I propose novel adjustment factors for structural benefit transfer to control for differences in the spatial distribution of environmental goods. Using forest preservation in Poland as an empirical example, I find that societal WTP is up to 4% higher for equal access to forests and up to 8% higher for an equal distribution of both income and access to forests.

Unraveling the Nexuses of Tourism, Terrorism, and Well-Being: Evidence from Pakistan

This study attempts to highlight the role of tourism and terrorism in shaping well-being measures and, to address the mechanism of how tourism and well-being measures can lead to terrorism in developing economies. Thus, it examines the causal relationship between well-being measures (overall well-being, social well-being, health well-being, and material well-being), tourism, terrorism, and inequality by focusing on Pakistan as a case study. We applied several time series techniques and procedures that include the bounds test, autoregressive distributed lag model mechanism, and Granger causality to analyze the relationships between the aforementioned variables. The findings suggest significant positive relationships between tourism and well-being measures. However, terrorism has a significant negative effect on well-being measures. Inequalities in the distributions of income and facilities have substantial negative effects on well-being measures and tourism; besides, it shows a significant positive association with terrorism. This study indicates that through effective tourism planning, policy makers can improve well-being measures, hence, leading to a reduction in terrorism. However, along with progress in well-being dimensions, policies, and long-term planning should be developed to ensure the equal distribution of income and facilities.

Determinan sosial ekonomi kesenjangan distribusi Pendapatan penduduk di Kawasan Timur Indonesia

Inequality of income distribution and its determinants still leaves mixed debate and empirical findings. The source of inequality in population income distribution is in Eastern Indonesia (KTI) in line with the economic development performance that is still low compared to Western Indonesia (KBI). This study aims to examine the socio-economic factors that influence the income distribution gap in KTI, with a focus on economic growth, employment opportunities, farmer exchange rates, regional minimum wages, and education. Quantitative analysis tools used are panel data regression models with fixed effect model estimation techniques. The data used is panel data of 12 provinces in Eastern Indonesia, for the period 2010-2017. The results showed that both partially and simultaneously economic growth, employment opportunities, farmer exchange rates, and education levels contributed significantly to reducing the income distribution gap. The recommendation for regional governments is to accelerate economic growth accompanied by the expansion of employment opportunities and education development equally, and also the optimization of agricultural sector development.

Sustainable Livelihood Strategies Rural Household in Sanden District Bantul Regency

People living in the countryside mostly have a profession as a farmer. Farming is one of the largest sources of income for rural households. In the district of Sanden, rural communities utilize a variety of land agroecosystems for agriculture. Utilization of various types of agricultural land agroecosystem is one of the household livelihood strategies. Livelihood strategies undertaken by rural communities aim to reduce poverty and improve household welfare. This research aims to (1) describe strategy of rural households to support the achievement of sustainable livelihoods (2) Knowing the inequality of farmers ' income distribution based on livelihood strategies used by rural households. The basic method used is a descriptive analytical method. The research site in Sanden district, Bantul regency was then taken by random farmer owners of 30 people as respondents. Rural household strategy to support sustainable livelihood achievement is calculated using descriptive statistics, and the inequality of farmer's income distribution based on livelihood strategies used by rural households is calculated using the Gini index and the Lorentz curve. The results showed that farmers ' household strategy to support the greatest sustainable livelihoods achievement in the form of consolidated strategies, and inequality of revenue distribution based on households livelihood strategies is moderate distribution inequality.

Ступінь нерівності у розподілі доходів: проблеми виміру та наслідки

Ступінь нерівності у розподілі доходів: проблеми виміру та наслідки

Does Financial Technology Affect Income Inequality in Indonesia?

Economic growth is insufficient to be a sole indicator of the population’s welfare. Specifically, high economic growth does not necessarily imply that the population is generally prosperous. Equal income distribution is crucial to achieving sustainable economic growth. Since 2000, the Gini index as a measure of income inequality in Indonesia showed an increasing trend. On the other side, financial technology 3.0 started to develop. This paper seeks to investigate the impact of fintech 3.0 development on income inequality in Indonesia and to identify the determining factors of income inequality in Indonesia. By using the partial adjustment model (PAM) with the observation period of 1990-2017, the study empirically shows that fintech 3.0 development that started in 2000 had a significant impact on income inequality in Indonesia. Besides, the investment variable also positively affect income inequality in Indonesia. Thus, the findings indicate that the Indonesian population did not equally utilize fintech development.
 Keywords: income inequality, financial technology, Indonesia, partial adjustment model

The impact of monetary systems on income inequity and wealth distribution

PurposeThis study uses the autoregressive distributed lag model (ARDL) econometric approach to investigate empirically the effects of cryptocurrencies, the gold standard and traditional fiat money on global income inequality measured based on the Gini coefficient, and various ratios of income inequality distribution such as top 1 per cent, top 10 per cent, top 40 per cent and top 50 per cent.Design/methodology/approachThe study uses the ARDL econometric approach.FindingsThe findings indicated that cryptocurrency and gold standard monetary systems contributed significantly to reducing global inequality of income and wealth distribution. Conversely, the traditional fiat money system contributes positively to global income and wealth inequality while also contributing significantly to their fluctuation.Practical implicationsThis suggests that the fiat monetary system results in the coercive redistribution of income and wealth if governments pursue a social welfare policy. They must resolve this conflict between the current fiat monetary system and social policy by opting for an alternative monetary system such as cryptocurrency or gold standard. These alternative monetary systems offer the promise of resolving the income and wealth inequality associated with the traditional monetary system which are accompanied with the channels of inflation, lack of financial inclusion and debt creation, and to offer a more sustainable financial system.Originality/valueThe study recommends that monetary policy must be revisited to account for its direct effect on income and wealth redistribution to achieve social welfare goals.

The impacts of liberalization and trade facilitation on economic performance, poverty and income inequality: An analytical study

This study examines the impacts of import duty and trade transaction cost reductions on economic performance, poverty, and income distribution inequality, through the top-down computable general equilibrium approach. Findings/Originality: It reveals that reducing import duty in agricultural decreases urban poverty but increases the poverty incidence at the rural and national levels. Reducing import duty in agricultural industry lowers urban and national poverty without affecting rural poverty. Meanwhile, the reductions of both import duty and transaction costs bring down the poverty incidence at all levels – urban, rural, and national. The inequality in rural and national income distribution increased due to the cuttings of import duty in agricultural and agricultural industry. However, it declined due to the reduction of transaction costs, and the combined transaction cost with import duty in agricultural or agricultural industry.

Analysis of Indonesia Inequality Income Distribution

The relationship between income distribution inequality and inflation is widely discussed in economics. The different concepts of macroeconomic management in various countries have different implications for each country. This paper aims to examine the relationship between inequality in income distribution and inflation. Panel ARDL with semi-annual data from 33 provinces in Indonesia for the period of 2012-2018 is used in this model. The results show that changes in poverty and economic growth are not statistically significant in affecting the changes of income disparity in short run. Inflation is too low, thus it is less effective at encouraging income inequality in Indonesia. In addition, in the long run, inflation does not affect the inequality of income distribution, it is assumed that the benefits of inflation are concentrated in groups of people with high-income levels. Moreover, economic growth has a negative impact on income inequality and poverty that eventually will aggravate the imbalance in income distribution. Therefore, its is recommended for Indonesia’s economy to be directed at increasing inflation to reach the ideal level in order to be able to reduce the imbalance in income distribution.
 Keywords: Inequality, inflation, poverty, growth, Panel ARDL

Faktor Faktor yang Mempengaruhi Ketimpangan Distribusi Pendapatan dan Implikasinya terhadap Kemiskinan di Propinsi Sumatera Selatan

The problem background of this research was Indonesia’s national economy that has stagnant growth of income inequality (Gini ratio) and increasing number of poor people, in despite of the national GDP growth indicator (GNP) has been increasing for several years. Regional economic growth in South Sumatra also increased based on GDP indicators, but the income distribution inequality has been slightly increased and South Sumatra’s inflation rate has greatly fluctuated in 2007-2017. Furthermore, farmer exchange rates, export values, human development index, and interest rate movements in South Sumatra has been declining in 2017 compared to 2007, despite the fact that overall infrastructure development has a tendency to keep increasing annualy. The purpose of this study was to examine and analyze the direct effects of inflation, farmer exchange rates, exports, human development index, infrastructure, and interest rates on the income distribution inequality in the South Sumatra. The research findings show that independent variables such as inflation, farmer exchange rates, exports, human development index, infrastructure, and interest rates have a significant effect simultaneously on income inequality in South Sumatra, while the exchange rate of farmers, exports and infrastructure has a significant partial effect on inequality income in South Sumatra. Furthermore, this study also finds that income inequality has a significant effect on poverty in the South Sumatra. Keywords: Inequality of Income Distribution, Inflation, Farmer Exchange Rates, Exports, Human Development Index, Infrastructure, Interest Rates, Poverty

The development of infrastructure and the level of poverty in the eastern part of Indonesia

This research aimed to figure out the infrastructure effect on the poverty level in the Eastern Part of Indonesia. The developed research model applies an econometric approach i.e. simultaneous equation model using data panel of 16 provinces. The variables of the energy, housing, transportation, clean water, education, health, and telecommunication were used to measure the effects of the infrastructure whereas the growth and income inequality were used as the intervening variables. The result indicates that housing, clean water, and telecommunication have a negative and significant effect, while energy has a positive and significant effect on the poverty level. Indirectly, housing, clean water, education, and telecommunication variables have a negative and significant effect on the poverty level. In addition, energy and transportation have positive and significant effects on the poverty level. Another finding is improving economic growth in the Eastern Part of Indonesia causing more equal income distribution. However, it is not accompanied by poverty reduction.

EFFECT OF THE EDUCATION AND HEALTHCARE SYSTEMS ON THE SOCIAL SECURITY LEVEL IN THE CONTEXT OF GLOBAL GOALS OF SUSTAINABLE DEVELOPMENT

The effect of the healthcare and education systems on the level of social orientation of economic development has been studied. It has been identified that low level of social orientation of the countries indicates the existence of national security threats in both economic and social spheres; that requires development of an efficient economic policy taking into consideration the goals of national sustainable development. Social factors have been classified into the following groups: demographic factors; indicators of the education system development; indicators of the labour market conditions; indicators of the healthcare system development; indicators of the system of private income distribution and socioeconomic inequality. Two main components of social security have been specified based on the sustainable development goals and security factors: education system development and healthcare system development that are characterized by the corresponding groups of indicators. The indicators have been systematized taking into account dynamics of their boundary values and potential trends of changes; the indicators have been applied as the criteria to identify possible critical threats or risks to the security; they also make it possible to timely consider and support the sustainability and security of social development. According to the results of integral estimation, certain countries have been determined to belong either to a group with optimally high security level or to the one with the lowest level. The research results prove the importance of the healthcare and education sectors in the context of both reaching the sustainable development goals and providing high level of social security. JEL: I15, I25, H55, Q01.