Lower Levels Of Income Inequality Research Articles

Democracy, Capitalism, and Income Inequality: Seeking Causal Directions

AbstractRecent research shows that lower levels of income inequality cause higher levels of democracy, and vice versa in a simultaneous relationship. A critical factor missing from these studies is a direct exogenous measure of capitalism in models explaining variation in income inequality and democracy. This study examines 50 countries over the years 1978–1993 and finds in a pooled two stage least squares modeling exercise that the Fraser Institute measure of capitalism appears to have a weakly positive linear impact on POLITY IV measures of democracy and a weakly positive linear impact on income inequality (more capitalism, more inequality). There appears to be no higher-order relationship between capitalism and democracy or income inequality, though there is a weak parabolic relationship between democracy and income inequality.

Inequality, Fiscal Capacity and the Political Regime: Lessons from the Post-Communist Transition

Using panel data for twenty-seven post-communist economies between 1987-2003, we examine the nexus of relationships between inequality, fiscal capacity (defined as the ability to raise taxes efficiently) and the political regime. Investigating the impact of political reform we find that full political freedom is associated with lower levels of income inequality. Under more oligarchic (authoritarian) regimes, the level of inequality is conditioned by the state’s fiscal capacity. Specifically, oligarchic regimes with more developed fiscal systems are able to defend the prevailing vested interests at a lower cost in terms of social injustice. This empirical finding is consistent with the model developed by Acemoglu (2006). We also find that transition countries undertaking early macroeconomic stabilisation now enjoy lower levels of inequality; we confirm that education fosters equality and the suggestion of Commander et al (1999) that larger countries are prone to higher levels of inequality.

Is Equality Good Medicine? Determinants of Life Expectancy in Industrialized Democracies

The association between income inequality which creates psycho-social stress and longevity is of a curvilinear, concave nature. Low levels of income inequality are connected with shorter life expectancy. As inequality increases so does life expectancy until a point is reached where further increases in inequality lead to decreases in life expectancy. This finding is consistent with general theories of the effects of stress on performance as found in the fields of social psychology and sports medicine. In addition, we found that the life expectancy of populations is driven by factors such as perceived political control, the generosity of the welfare state, life-styles, GDP per capita and the poverty rate. Independently of which measure of income inequality was used or which statistical method was applied, these findings remained robust even when a number of alternative explanations were controlled for.

Local Capitalism, Civic Engagement, and Socioeconomic Well-Being

This analysis is designed to extend a newly emerging body of social stratification research grounded in theories of civil society. The goal of this larger body of research and writing is to provide an alternative social and economic developmentparadigm to the dominant neoclassical/rational choice/human capital perspective. In an economic world woven together by global marketforces, local social structures can become key variables that influence which places prosper and which decline. We begin by hypothesizing that local capitalism and civic engagement variables are associated with positive socioeconomic outcomes (higher income levels and lower levels of income inequality, poverty, and unemployment). To test these notions, we employ data on more than 3,000 U.S. counties. Net of the substantial effects of the control variables, three measures of local civic society -small manufacturing establishments, familyfarms, and civically engaged religious denominations - vary as hypothesized in three offour models. The performance of these local capitalism and civic engagement variables suggests a robust association with beneficial local socioeconomic outcomes. We conclude by outlining needed research on civil society that would contributefurther to a social developmentperspective. Over the past twenty-five years, social scientists have begun to define the contours of a global system of economic production and mass consumption (Wallerstein 1974). During this time, the orienting frame for analysis has shifted from an

Local Capitalism, Civic Engagement, and Socioeconomic Well-Being

This analysis is designed to extend a newly emerging body of social stratification research grounded in theories of civil society. The goal of this larger body of research and writing is to provide an alternative social and economic development paradigm to the dominant neoclassical/rational choice/human capital perspective. In an economic world woven together by global market forces, local social structures can become key variables that influence which places prosper and which decline. We begin by hypothesizing that local capitalism and civic engagement variables are associated with positive socioeconomic outcomes (higher income levels and lower levels of income inequality, poverty, and unemployment). To test these notions, we employ data on more than 3,000 U.S. counties. Net of the substantial effects of the control variables, three measures of local civic society —small manufacturing establishments, family farms, and civically engaged religious denominations — vary as hypothesized in three of four models. The performance of these local capitalism and civic engagement variables suggests a robust association with beneficial local socioeconomic outcomes. We conclude by outlining needed research on civil society that would contribute further to a social development perspective.

Inequality and Growth Reconsidered: Lessons from East Asia

East Asian economies have experienced rapid growth over three decades, with relatively low levels of income inequality, and appear to have also achieved reductions in income inequality. We argue that policies that reduced poverty and income inequality, such as emphasizing high-quality basic education and augmenting labor demand, also stimulated growth. Closing two virtuous circles, rapid growth and reduced inequality led to higher demand for, and supply of, education, Moreover, low levels of income inequality may have directly stimulated growth. We present cross-economy regression results that are consistent with a positive causal effect of low inequality on economic growth and with low inequality of income as an independent contributing factor to Fast Asia's rapid growth. We conclude that policies for sharing growth can also stimulate growth. In particular, investment in education is a key to sustained growth, both because it contributes directly through productivity effects and because it reduces income inequality.