Income Inequality Research Articles

Entrepreneurship and income inequality: a quantile approach from global panel data

ABSTRACT This paper explores the relationship between entrepreneurship and income inequality, drawing from unbalanced panel data from 104 countries between 2001 and 2023, sourced from the Global Entrepreneurship Monitor, the Standardized World Income Inequality Database, and the World Bank. Employing system GMM and panel quantile regression (MM-QR), it fills crucial gaps in the literature, such as cross-country heterogeneity using panel data, endogeneity, and the varying effects of entrepreneurship across different quantiles of the income inequality distribution. The findings reveal that entrepreneurship reduces income inequality, with the effect being most pronounced at lower quantiles of the income inequality distribution. Moreover, women’s entrepreneurship emerges as a powerful force in reducing inequality, with a more pronounced effect than men’s entrepreneurship, particularly at the higher quantiles where income inequalities are most persistent. While opportunity-driven entrepreneurship narrows income inequality more than necessity-driven, it shows no distinct impact on income inequality quantiles. These findings challenge the predominant literature suggesting that entrepreneurship worsens income inequality and underscore the potential of entrepreneurship to empower marginalized groups, foster economic mobility, and promote social equity. Moreover, they provide critical insights for policymakers, emphasizing the need to promote inclusive entrepreneurial ecosystems necessary for equitable economic growth.

Corruption Perception Index (CPI) and Macroeconomic Dynamics: Fragile Five Perspective

This study examines the correlation between the corruption perception index (CPI) and economic and social indices in the Fragile Five nations (Brazil, India, Indonesia, Turkey, and South Africa) from 2012 to 2022. The study examines foreign direct investment (FDI), gross domestic product per capita (GDPP), human development index (HDI), income inequality (PALMA), and unemployment rate (UNEMP) as independent factors, with the Corruption Perception Index (CPI) serving as the dependent variable. The analysis, employing the least squares (LS) method and heteroskedasticity-robust standard errors, demonstrates that economic growth (GDPP) and the unemployment rate (UNEMP) exert statistically significant influences on the impression of corruption. Nonetheless, the impacts of social indices like the Human Development Index (HDI) and income inequality (PALMA) are insignificant in the model. The findings suggest that economic growth improves the perception of corruption, but FDI has an unexpectedly negative effect. The positive association of the unemployment rate with the CPI can be explained by structural differences in the labor market and the impact of social perceptions of unemployment. These results, largely consistent with the literature, reveal the multidimensional relationship of corruption perception with economic and social indicators. The study also emphasizes the necessity of strengthening basic principles such as transparency, accountability, and the rule of law in the fight against corruption. An effective anti-corruption policy design will be possible through a holistic approach that simultaneously pursues economic growth and social equality goals. In this context, the findings provide both theoretical and practical guidance for policymakers.

DEVELOPMENT FAILURE IN LOW-INCOME COUNTRIES: THE COMPLEXITY OF MULTIDIMENSIONAL POVERTY IN MOZAMBIQUE

This research seeks to analyze how multidimensional poverty, rooted in multisectoral problems, contributes to development failure in Mozambique. This study elucidates that multidimensional poverty in Mozambique is entrenched in political and security crises, as well as the instability of community socio-economic conditions. These issues arise from historical, socio-economic, and political dynamics, alongside a crisis of democracy, corruption, and debt. The study examines these challenges through the lens of the Multidimensional Poverty Index (MPI) to accurately explain the poverty conditions in Mozambique. Employing qualitative analysis and a comprehensive literature review, this research facilitates an in-depth understanding of the relationship between development failure and multidimensional poverty in Mozambique. The findings reveal that prolonged poverty in Mozambique is influenced by a multitude of factors, including weak enforcement of human rights, corruption, conflict and security crisis, income inequality, inadequate public infrastructure, and other critical challenges. This research contributes to enriching literature about multidimensional poverty, highlighting the correlation between this kind of poverty in poor countries and their national development failures.

Consumer and Corporate Debt in a 3D Macroeconomic Model

We build on the literature of consumer debt–income inequality nexus, by developing a post-Keynesian model of growth and income distribution that incorporates both consumer and corporate borrowing. Specifically, we examine a non-linear dynamic system of three differential equations of workers’ debt-to-capital ratio, corporate debt-to-capital ratio, and the accumulation rate. We conduct simulations to solve the system for the long-run equilibrium points and examine local stability using the Routh–Hurwitz conditions. Additionally, we conduct a comparative statics analysis and investigate the stability of the model using a measure of the maximum distance among the three equilibrium points. Our key findings suggest that although our model shares several quantitative and qualitative aspects with the 2 × 2 models, the inclusion of corporate debt alters the impact of parameter changes on macroeconomic stability. This incorporation increases the number of parameters that have differing effects on stability across various scenarios. The ratio of external-to-internal borrowing, along with the interest rate, is among the few parameters that consistently undermines macroeconomic stability across all scenarios.

The Poverty Reduction Capacity of Nature‐Based Tourism in Lao PDR—A Social Accounting Matrix (SAM) Study

ABSTRACTThis study investigates the distributional impact of nature‐based tourism (NBT) revenues on relative incomes and poverty incidence by employing a SAM model in a village adjacent to a protected natural area in Lao PDR. The findings suggest that while community‐based tourism (CBT) benefits both poor and non‐poor households, indicating the potential for lifting some poor households out of poverty, particularly when they are directly involved in tourism, it also exacerbates income inequality between the wealthiest quintile and the rest. Furthermore, qualitative data underscores variations in the benefits derived from commercial natural resource exploitation when local communities collaborate with a private sector company, as opposed to managing initiatives independently. These findings hold significant implications for government policymakers seeking to determine the most effective strategies for promoting NBT to foster economic growth, poverty alleviation and natural resource conservation in underserved rural areas.

Mitigating Income Inequality in Bali Province, Indonesia

Mitigating Income Inequality in Bali Province, Indonesia

Build or Break? The Impact of Rural E‐Commerce on Household Income Inequality in China

Build or Break? The Impact of Rural E‐Commerce on Household Income Inequality in China

Evaluating future mobility: back to the future in the UK policy?

ABSTRACT Increasing urbanisation in the world economy in the last 50 years has produced a number of profound challenges for the organisation and management of economy and society. In recent years these challenges have been compounded by climate changes geo-political risk, uncertainty and consequent conflicts; disease pandemics; and, rising income and territorial inequalities, all of which have had profound consequences for mobility. For many policy makers and practitioners technological (mainly digital) solutions are promoted to address individual issues for what is a systemic problem. The UK appears to be a particular exemplar of this approach whose mainstream view of transport technologies is a backward view of the future. In contrast, the EC appears to be based upon a more socio-technical transition in which smart urban mobility within multi-modal systems, appears more suitable for the current and future challenges of mobility. This paper explores these issues in order to stimulate debate about future research in this crucial area of the social sciences.

Modeling and mapping of contextual factors associated with adolescent birth rates in Thailand between 2009 and 2018

BackgroundTo meet indicator 3.7.2 in the Sustainable Development Goals (SDGs), Thailand must reduce the adolescent birth rate (ABR) to below 15 per 1,000 women aged 15–19 years by 2027, down from 20.9 per 1,000 in 2023.PurposeThis study aims to describe ABRs geographically, identify hot and cold spots as well as spatial outliers, and determine the association between ABRs and spatial contextual factors at the district level in Thailand from 2009 to 2018.MethodsOrdinary Least Squares (OLS) and Geographically Weighted Regression (GWR) were employed to examine the spatial patterns of ABRs and the association between ABRs and spatial contextual factors, separately for the 2009–2012 and 2013–2018 periods.ResultsABRs at the district level in Thailand during both periods were spatially random. The OLS models for both periods satisfied all OLS requirements, with no correlation issues among explanatory variables (VIF < 5.0). During the 2009–2012 period, five variables were significantly associated with an increase in ABRs: income inequality, annual per capita income, monthly per capita expenses, the percentage of female-led households, and the percentage of households led by a single parent. In the 2013–2018 period, variables associated with an increase in ABRs included income inequality, annual per capita income, the percentage of households affected by divorce, the percentage of adolescents who completed only compulsory level education and were unemployed, and the availability of Youth-Friendly Health Services and safe abortion services.ConclusionAs there is no pronounced geographical variation in ABRs and their contextual determinants, a uniform set of policies and programs targeting the reduction of ABRs could be implemented across all districts in Thailand.

Persistent Income Inequality in Sub-Saharan Africa: The Role of Institution Index and Effective VAT

Persistent Income Inequality in Sub-Saharan Africa: The Role of Institution Index and Effective VAT

Low-pay work and the risk of poverty: a dynamic analysis for European countries

Abstract This paper explores how householders’ and partners' low-pay conditions affect the risk of poverty of European households. We use 2016–2019 longitudinal European Union Statistics on Income and Living Conditions data, model poverty and labour market outcomes, and account for possible endogeneity of low-pay work in the poverty equation. Low-pay work is defined on gross hourly wage basis. We find that low-pay work increases the risk of poverty compared to high-pay conditions. Notably, when compared to non-employment, the effect of low-pay work on poverty differs between householders and partners. The effect tends to be stronger for the former and smaller for the latter, which stresses the leading role of householders in income formation and the added-worker role of partners in households. The risk of poverty for low-pay workers is even reinforced by their higher probability of being employed in job positions with fewer annual working hours, such as part-time and temporary contracts. The magnitude of low-pay effects on poverty appears to be associated with institutions capable of sustaining the wage floor, earnings and income inequalities, and the generosity of social transfers. We find evidence of feedback effects from poverty on future labour market outcomes, suggesting a self-reinforcing mechanism between poverty and poor labour conditions, which along with limited upward mobility in the labour markets, may lead societies toward persistent income segmentation.

Slavery, Prosperity, and Inequality in Roman Pompeii

Abstract Historians of premodern economies, in contrast to modern ones, have only infrequently contemplated the economic contribution of slavery. Here, I suggest that quantitative and statistical tools allow us to evaluate the place of slavery in an early economy, using Roman Pompeii as a case study. At the time of its destruction in 79 ce, Pompeii appears prosperous, having benefitted from the economic development thought to have characterized the Roman world. Recent discoveries, meanwhile, shed new light on the conditions of working classes and slaves throughout the city. These narratives can be seen to form two sides to the same coin, as Pompeii’s prosperity was created in large part thanks to slave labour. The connection is supported by constructing a probabilistic model, which suggests some 6 million sesterces (HS) flowed every year to Pompeii’s masters through their exploitation of slaves. Slave owning probably formed the largest single income source for the urban economy. This scale of income is shown to be consistent with recent reconstructions of wealth and income inequality in the city. The results not only speak to slavery’s profound importance to Pompeii’s prosperity, but they encourage a recentring of labour and slavery in Roman economic history.

The nonlinear relationship between housing prices and income inequality

The nonlinear relationship between housing prices and income inequality

Persistent regional income inequalities in Kenya during the COVID-19 pandemic: evidence from a bi-dimensional inequality decomposition analysis

Persistent regional income inequalities in Kenya during the COVID-19 pandemic: evidence from a bi-dimensional inequality decomposition analysis

Financial Development, Economic Growth and Income Inequality in Central Eastern European Transition Economies: Evidence from the Toda-Yamamoto Panel Causality Test

Financial Development, Economic Growth and Income Inequality in Central Eastern European Transition Economies: Evidence from the Toda-Yamamoto Panel Causality Test

Does FinTech enhance the effectiveness of financial inclusion to reduce income inequality? Evidence from Sub-Saharan Africa

Does FinTech enhance the effectiveness of financial inclusion to reduce income inequality? Evidence from Sub-Saharan Africa

Towards Common Prosperity: Accelerated Depreciation Policy of Fixed Assets and Labor Income Share

While achieving common prosperity necessitates a focus on the efficiency and equity of the primary income distribution, income inequality persists in China. As a critical tax incentive mechanism, China’s Accelerated Depreciation Policy (ADP) of fixed assets not only promotes important changes in corporate productivity and production methods but also significantly influences the primary income distribution within enterprises. However, current research offers a limited understanding of the importance of the ADP in the primary income distribution. Given that the core of the primary distribution lies in adjusting the labor income share, we regard 2014’s ADP as an exogenous “quasi-natural experiment”. After theoretically analyzing this policy’s effect on the labor income share of enterprises, our use of difference in differences (DID) validates our theoretical expectations with respect to China’s A-share listed companies during 2010–2022. The results show that the ADP can significantly increase enterprises’ labor income share; all hypotheses proved to be robust. The analysis of mechanisms shows that the ADP mainly affects the labor income share as it upgrades the corporate human capital structure as well as rent-sharing. Analyzing for heterogeneity, we find that positive effects due to the ADP affecting the labor income share are more prominent among private enterprises, medium and small-sized firms, companies with high financing constraints, capital-intensive industries, manufacturing enterprises, and those with a high level of skilled labor. The conclusions of this study contribute to uncovering the impacts of the ADP on income distribution, offering a clearer identification of particular mechanisms explaining the ADP’s effect on the labor income share. It holds significant theoretical value for understanding the micro-mechanisms of economic impacts generated by relevant policies. Furthermore, it provides policy insights in achieving common prosperity.

Income Inequality and Survival Strategies of Primary School Physical Education, Sport and Health Teachers

There is a problem in the inequality of physical education teachers experiencing many complaints from private physical education teachers regarding the low income they get far from expectations. Not a few of the teachers they look for side jobs in meeting their daily needs. This research is a quantitative descriptive research, which intends to find out and find information and a description of how to survive physical education teachers and this research uses interviews and data collection given to physical education teachers. The subject of this research is the participants of the National Seminar on Physical Education, Sports and Health for Milleneal Primary Schools which is held through the zoom application teleconference, the number of physical education teachers at the elementary school level who participated was 43 people. In this study using the Explanatory Sequential Mixed Methods method with data collection in the form of geogle form. For quantitative data analysis using the mean difference test and the craw association test to determine differences in the status of physical education teachers for qualitative data using the typification method and word gorization of physical education teachers based on their survival strategies. With the results of data analysis and typology categorization, it can be concluded that 1) There is income inequality between private and public employee teachers. 2) There is no relationship between employment status and their survival activities, and (3) There are four ideal types of teachers' survival strategies based on their employment status and survival strategies.

Too Lucky to Be True: Fairness Views under the Shadow of Cheating

Abstract Income inequalities within societies are often associated with evidence that the rich are more likely to behave unethically and evade more taxes. We study how fairness views and preferences for redistribution are affected when cheating may, but need not, be the cause of income inequalities. In our experiment, we let third parties redistribute income between a rich and a poor stakeholder. In one treatment, income inequality was due only to luck, whereas in two others rich stakeholders might have cheated. The mere suspicion of cheating changes third parties’ fairness views considerably and leads to a strong polarization that is even more pronounced when cheating generates negative externalities.

Meta economics: generating moral economies

ABSTRACT We live in an increasingly volatile and complex time. The climate is rapidly changing; the world’s biodiversity is rapidly declining, unleashing the 6th great extinction; income and wealth inequality is rising, with few people believing in the potential of a better future; and authoritarianism is undermining democracy. There is a growing sense that traditional, neo-liberal economic systems and the behaviours they encourage are contrary to long-term human and nature flourishing. The foundations of the western 20th century consensus are being shaken. The essential flaw of neo-classical economics is that it is based on the idea of individual actors, whether selves or firms, seeking to maximize their individual outcomes. But we have learned from complexity science, quantum physics and ecology, that the world is not so simple. Every entity, whether a quark, a microbe, a household, a business or a country, is part of a relational field, a vast array of interconnections that support, challenge and influence the entity. This entangled understanding of the world calls for a meta-economics, integrating economics with ethics, the social sciences and the natural sciences, such as planetary health, ecology, neuroscience and systems thinking.