Interregional Income Inequality Research Articles

Оценка неравенства доходов населения в Республике Башкортостан

Currently, the problem of excessive income inequality of the population as one of the forms of social inequality remains unresolved. At the same time, modern scientific research notes the negative social and economic consequences of inequality for the life of society, its development and sustainability. The article evaluates the degree of inequality of monetary incomes of the population in the Republic of Bashkortostan, including against the background of interregional income inequality in the context of the level of socioeconomic development of the regions of Russia. To identify the relationship between the level of inequality and the socio-economic development of the regions, statistical tools were used — analytical grouping. The results of the study showed that in the Republic of Bashkortostan taking into account the level of its socioeconomic development the degree of income inequality of the population is quite high, which requires the development of urgent regional policy measures aimed at equalizing the incomes of the population.

Межбюджетные трансферты и их влияние на сокращение диспропорций регионального развития

The article is devoted to relationship assessment between intergovernmental transfers from federal to regional budgets and the growth of real incomes of the population. It was found that the Gini coefficient, which reflects the deviation of income distribution from absolute equal distribution, in the whole country and for specific entities of the Russian Federation, is slightly higher than 0.4, which, according to the World Bank, is a critical level of inequality. Thus, Russia maintains a consistently high level of interregional income inequality. By assessing the σ- and β-convergence of social and economic indicators of 74 regions of Russia in 2000–2021 it is concluded that there is a process of convergence of real per capita incomes, but the role of intergovernmental transfers in this is not obvious. A positive and significant impact was recorded mainly due to subsidies, which can be explained by their infrastructural nature. It is noteworthy that subsidies, being a direct tool for equalizing the budgetary provision of the constituent entities of the Russian Federation, which are based on a formalized calculation approach, did not have a significant impact on the growth of real incomes of the population. The contribution of intergovernmental transfers is undeniable in the case of fiscal or revenue equalization, but it is not a sustainable factor in regional growth. The model additionally included such indicators as the level of inflation, investment in fixed capital, the share of employees of state bodies and local governments in the average annual number of employees, the ratio of the employed population to the total population, the amount of assigned pensions, etc. The latter had a positive effect on the convergence of real income per capita, which is consistent with the results obtained in the research.

Налоги солидарности как инструмент межрегионального перераспределения рентных доходов в России

Increase in rent relations contributes to the strengthening of interregional income inequality, since business entities appropriate the territorial rent in economically developed regions. Traditional income taxation instruments do not deal with the redistribution of territorial rent. On the contrary, such instruments, as the progressive personal income tax in Russia, can increase interregional inequality. Therefore, the presents study aims to substantiate the possibility of using a solidarity tax for interregional redistribution of rent income and develop the optimal tax model for current conditions. The article describes the solidarity tax from the perspective of rent taxation, determines its key features and methods of levying. To examine interregional income inequality, constituent entities of the Russian Federation were clustered using Ward’s method according to average monthly wages and the share of personal income tax in the regional budget. Each cluster is characterised by similar personal income and tax revenue. The solidarity tax burden will be on the regions of the first four clusters. It is proposed to levy the solidarity tax as a personal income surtax on a progressive scale, depending on the ratio of accrued wage of a taxpayer and the average monthly wage in Russia for the previous year. This approach will contribute to a smooth change in the effective personal income tax rate, as well as to at least 74% increase in subsidies to budgets to compensate for raising the wages of public sector employees. The developed proposals can be applied to improve the tax mechanism of redistribution of rent income. Future research may focus on developing alternative models of solidarity taxes, including for entrepreneurial and corporate income, in the context of the Covid-19 pandemic.

International trade, geographic heterogeneity and interregional inequality

We study the effect of international trade on interregional income inequality from 1992 to 2012 in the majority of countries worldwide using satellite night-light-based inequality proxies. For our analysis, we develop novel indicators for within-country heterogeneity in trade costs that are based on exogenous geographical features. In order to deal with potential endogeneity issues, we apply a gravity-style instrument that utilizes the occurrence of large natural disasters striking trade partners, as well as a Bartik-style instrument. In contrast to previous studies, our IV estimates reveal that international trade aggravates economic disparities only in those countries that have a higher within-country heterogeneity in terms of their access to the world market and their within-country trade costs.

Club convergence and inter-regional inequality in Mexico, 1940-2015

ABSTRACTIn this paper, we analyse the convergence patterns in inter-regional inequality and income per capita for the Mexican states over the period 1940–2015. To that end, we apply a time-series approach considering temporal and transitional heterogeneity. Results indicate that Mexican states do not converge to the same long-run equilibrium. Instead of overall convergence, we find club convergence for both regional inequality and income per capita. The existence of clubs means that measures aimed at reducing income inequality and promoting regional growth should consider the specific characteristics revealed in the convergence analyses. Furthermore, pro-growth regional policies in Mexico may not necessarily reduce inter-regional income inequality. Income disparities thus need to be specifically addressed through pro-poor regional policies.

Pengaruh Pertumbuhan Ekonomi dan Investasi Terhadap Ketimpangan Pendapatan di Kabupeten/Kota Provinsi Nusa Tenggara Barat

The distinction of interzonal potential will cause several problems such as uneven economic growth, the area-centered spreading investment, and income inequality. This research aims to analyze the effect of economic growth and investment on the inter-regional income inequality in West Nusa Tenggara from 2012 to 2017. This research uses secondary data obtained from BPS-Statistics Indonesia (Badan Pusat Statistik), and the Indonesian Investment Coordinating Board (Badan Koordinasi Penanaman Modal – BPKM). Williamson Index is used to representing income inequality, and the method analysis is the panel data analyzing with a Fixed Effect Model (FEM). The effect between a dependent variable and independent variable will be shown that economic growth has a positive and significant influence towards the income inequality, and investment has a positive and not significant influence towards the income inequality.

Partial decentralization as a way to prevent secessionist conflict

We study secessionist conflict driven by cultural and economic motives in a political union of two regions, and analyze under what conditions partial decentralization may serve as a conflict-mitigating strategy. While the probability of a successful secession is increasing in heterogeneity, it is increasing in interregional income inequality if and only if the union is socially efficient to start with. If the cost of diversity decreases proportionally with decentralization, there always exists a range of decentralization levels compatible with peace. Greater inequality always widens this range but greater heterogeneity widens the range if and only if the union is efficient. The decentralization level implemented to prevent conflict relates to the underlying secession probability. If decentralization is not reversible, peace is not self-enforcing, yet multiple rounds of decentralization can be used to postpone the eventual date of secession.

Interprovincial differences in labour force distribution and utilization based on educational attainment in Indonesia, 2002–2015

AbstractIntroducing an employment variable with five levels of educational attainment per capita and employing inequality decomposition, this study addresses three questions. How does labour force vary by education and provinces? How does labour force utilization vary by education and provinces? What are the potential causes of differences? We find that the no‐primary‐education group is more endowed in less‐developed provinces and allocated most unequally among education groups across provinces, despite past universal primary education policies. The senior‐secondary‐education group with the largest labour share is a growing concern due to the lower employment rate and largest interprovincial inequality.

Trade integration and regional income disparities in a growth model with the service sector and footloose capital

ABSTRACTThis paper proposes a North–South growth model of endogenous industry location which is consistent with recent empirical work showing that regional income disparities have increased in many countries with the process of trade integration. The model incorporates a service sector that benefits from intersectoral knowledge spillovers from the manufacturing sector. We find that, when these spillovers are local, trade integration leads to an increase in interregional real income inequality.

Альтернативные оценки доходов населения в регионах России

Average income per capita is one of the main indicators of the standard of living. This indicator is widely used in research devoted to poverty, interregional income inequality, and is also the main reference point of success of pursued regional policies. A number of researchers note poor quality of official data on household income and call into question their reliability in some regions of Russia. The main reasons include the following: the scale of shadow economy, especially at the level of some regions; insufficient state financing of respective research; and outdated statistical methods of data processing. The author offers the method of quality checking of official statistical data on income per capita by means of a number of indirect indicators. Application of this method also allows receiving alternative estimates of the average per capita income of the population in regions of the country. On the basis of data for 2013-2014 it is shown that in a number of regions official statistical data are underestimated by more than 20%. The received alternative estimates of the average per capita income can be used in further research in place of official indicators.

Contribution of Various Sources to Interregional Personal Income Inequality in Russia

Contribution of Various Sources to Interregional Personal Income Inequality in Russia

The impact of intergovernmental transfer funds on interregional income disparity in Indonesia

ABSTRACTThe purpose of this paper is to identify the impact of intergovernmental transfer funds on interregional income disparity in Indonesia after reforms by the administration towards fiscal decentralization. Household income data from 2006 and 2011 are used to generate interregional and intraregional income inequality index data. It is found interregional income disparities are affected by intergovernmental transfer funds, physical and human capital, employment, agglomeration, industrialization, openness, and geographical location. Intraregional income inequalities in rich provinces and poor provinces both have positive effects on interregional income disparity. If a central government increases the intergovernmental transfer fund to the rich province by 1%, this widens the interregional income disparity by 0.68%. An increase of the intergovernmental transfer fund to poor provinces by 1% is expected to reduce the interregional income disparity by 1.06%.

The Genesis of the Modern Eritrean Struggle (1942-1961)

My empirical findings demonstrate that although ethnic heterogeneity was important, it was not a sufficient cause for the onset of violent ethnic conflict. Ascriptive identities did not lead to a smooth and effortless ethnic mobilization. Capitalist expansion may have increased national and inter-regional income inequality within Ethiopia, but it did not disadvantage Eritrea. If income inequality and economic marginalization and exploitation by the center were the dominant reasons for the outbreak of ethnic conflict, the southern, coffee-producing regions would have led the ethnic mobilization. If anything, Eritrea benefited from the increased integration of the Ethiopian economy in the international economy far more than other regions. Inter-ethnic, elite-level agreements between Eritreans and Amhara did not break down; at the very least they strengthened over the course of the federation years and in the beginning of the unification period, even incorporating sectarian differences. Finally, in terms of arguments that stress Eritrea’s exploitation by the central Ethiopian state, I rebut this claim by showing that Eritreans commenced an ethnic mobilization drive even when their benefits and assistance from the center were increasing. My argument focuses on the causal relationship between the intra-ethnic elite-level competition for leadership over the Eritrean and the economic policies that the Amhara imposed on the Eritreans in the imperial era of the Ethiopian state. The Eritrean ethnic mobilization drive turned violent when elite-level, intra-ethnic Eritrean divisions interacted with the income effects of the economic policies imposed upon the average Eritrean ethnic group members by the Ethiopian state: economically-dependent Eritreans prodded their ethnic group leaders in a series of bidding wars with each other that made peaceful accommodation with the Amhara leaders of Ethiopia infeasible. To illustrate this argument, I proceed as follows: I present the incorporation of Eritrea within Ethiopia after Eritrea’s decolonization, examine the intra-Eritrean divisions and their relationship to the Ethiopian imperial centers, show how the economic policies that the Ethiopians imposed upon Eritrea impacted the Eritrean ethnic mobilization drive, and then show how economically-dependent Eritreans incentivized rival Eritrean political leaders to engage in outbidding with respect to the Ethiopian authorities.

Spatial Dimensions of Income Inequality in Nepal

This paper investigates spatial dimensions of income inequality in Nepal using unit record data from the Living Standards Measurement (LSM) survey of 1995/96. The Gini, Atkinson and generalized entropy indices are used to measure income inequality. The results reveal that per capita income inequality in Nepal is quite high. The decomposition analyses based on ecological and geographical groupings reveal that the contribution of between-region inequality component to aggregate income inequality is less than 10 per cent. Since the poor regions have aligned with social and political conflicts, the policies to reduce inter-regional income inequality should be given far higher priority than what the statistical decomposition analyses suggest. The geographical sub-division is more salient than the ecological sub-division for the understanding of inequality. The growth of income in all the geographical rural regions, except the Eastern Terai, should reduce aggregate income disparity in Nepal.

Studies on income inequality among Russian regions

This article reviews domestic and foreign studies that empirically analyze inter-regional income inequality in Russia. The studies are grouped according to statistical approach applied (cross-section approach, time-series approach, and distribution dynamics approach). The adequacy of techniques used and data analyzed is discussed. The issue of relationship between examining inter-regional income inequality and policy implications is considered as well.

EMU and the dynamics of regional per capita income inequality in Europe

This paper analyzes the evolution of per capita income inequality among 197 European regions between 1977 and 2003, and seeks evidence of the relationship between the European Economic and Monetary Union (EMU) and interregional income inequality. The conclusion is that overall interregional income inequality has decreased since 1977, owing to a decrease in between-country inequality. The panel analysis conducted in this paper suggests that the adoption of the common currency has, thus far, exacerbated regional inequality in poorer EU countries, while it has not significantly affected regional inequality within richer countries. Inequality in less advanced countries has also increased with the establishment of the convergence criteria and with the implementation of the Single Market.

REGIONAL SHORT-RUN EFFECTS OF TRADE LIBERALIZATION IN BRAZIL

We use a single-country multi-regional computable general equilibrium model to evaluate regional short-run impacts of reduction in import tariffs resulting from recent free trade area agreements, on poverty and distribution of income in Brazil. Results show that trade can reduce inter-regional income inequality, but poor urban households lose with trade liberalization. Trade policy alone is not sufficient for achieving more equitable income distribution goals in Brazil. Without greater investment in human and physical capital, incomes in most regions of Brazil are likely to lag behind incomes in the South/Southeast, the most developed regions in the country.

Impact of the Global Crisis on Spatial Relationships in Russia

This paper seeks an answer to the question of whether the global crisis had a persistent effect on inter-regional income inequality and spatial market integration in Russia. Results obtained suggest that the answer is generally negative.

Factor Decomposition of Interregional Income Inequality before and after Indonesia's Economic Crisis

Factor Decomposition of Interregional Income Inequality before and after Indonesia's Economic Crisis

Methodologies of Analyzing Inter-Regional Income Inequality and Their Applications to Russia

This paper provides an overview of methodologies used to analyze inter-regional income inequality, and a critical survey of empirical studies that deal with Russian regions. It discusses implications of the growth theory regarding dynamics of inter-economy income inequality. Methodologies for empirically analyzing income inequality are classified as the cross-section approach, time series approach, and distribution dynamics approach. Specific methodologies are described within the framework of this classification, touching upon the subject of their applicability fields. The survey of studies on income inequality among Russian regions summarizes more than 30 papers grouped according to main approaches used for the analyses.