Reduce Income Inequality Research Articles

Does bank branch density reduce income inequality in the Spanish provinces?

This paper analyzes whether the density of bank branches is affecting income inequality in the Spanish provinces in the post-crisis years (2015–2019). The results show a non-significant impact for the analyzed period, and hold for a variety of scenarios, estimation methods and different types of bank. Then, although most previous literature suggests that bank branches reduce inequality, especially in advanced economies, that finding does not hold for the Spanish case. The advance of digitalization and the emergence of new forms of banking are potential candidates that might explain our results.

Examining the Effect of Income-Based Inequalities and Dental Service Provision on Dental Service Utilization among Older Australians: A Multiple Mediation Analysis.

Public service provision is one of the keys to reducing inequalities in the utilization of dental services. Given the increase in the aging population, there should be a focus on older adults' oral health. However, this is often overlooked. This study investigates the effectiveness of public services in reducing income-related inequalities in dental service utilization among older South Australians. A multiple counterfactual mediation analysis using the ratio of mediator probability weighting approach was used to explore the proposed mediation mechanism using a South Australian population of older adults (≥65 y). The exposure variable in the analysis was income, and the mediators were concession cards and the last dental sector (public or private). The outcome variable was the time of last dental visit. Half of the older adults with high income (≥$40,000) owned a concession card, and 10% of those who attended public dental services belonged to this group. Interestingly, only 16.3% of the study participants had visited the public dental sector at their last dental appointment. Results showed a negligible indirect effect (odds ratio [OR], 0.99; 95% confidence interval [CI], 0.85-1.05) and a significant direct effect (OR, 3.09; 95% CI, 2.24-4.87). By changing the potential outcome distributions to the counterfactual exposure distributions and taking the mediators' distribution as a counterfactual exposure distribution, the odds of dental visits occurring before the past 12 mo approximately tripled for low-income compared to high-income individuals. Income inequalities were associated with relatively delayed dental visits in older South Australians, and provision of public services could not improve this pattern. This might happen due to inequitable access to concession cards and public services. A review of policies is required, including addressing income inequalities and implementing short-term approaches to improve service utilization patterns in older South Australians. The findings of this study can enable policymakers for informed decision-making about the provision of public dental services for older Australians. This study emphasizes the importance of reviewing the current public dental services and subsidies and implementing short-term approaches to reduce income inequalities for older Australians.

Institutional Quality, Corruption, and Income Inequality - A Panel Study of Selected SAARC Economies

Previous studies have primarily focused on issues related to income inequality, aiming to identify the underlying causes and urging swift action to mitigate such disparities. In this context, the current article expands upon existing literature by introducing the influence of corruption and institutional quality. This study contributes to the existing knowledge by investigating the interplay between institutional quality, corruption, and income inequality within SAARC countries spanning 2000 to 2021, sourced from World Governance Indicators, Transparency International, Global Consumption and Income Project, and World Development Indicators. After analysed the properties of data, FMOLS analytical approach employed. The empirical analysis validates the enduring effects of the examined factors on income inequality over the long term. The findings indicate that institutional quality exerts a notable and favorable influence in reducing income inequality. Conversely, corruption, the combined impact of corruption and institutional quality substantially and adversely affect income inequality. Addressing the imperative of ensuring an equitable income distribution across the SAARC economies necessitates implementing comprehensive strategies to foster enduring institutional quality and effectively manage corruption. Study’s conceptual and empirical advancements carry significant implications for policy formulation within this region. They offer valuable insights for the region’s endeavors to ameliorate income inequality. This study underscores the importance of measures to enhance institutional quality and combat corruption within SAARC countries. Such measures should be strategically designed to tackle income distribution challenges and promote greater equity.

Land Reform and Its Effect on Farm Household Income Inequality: Evidence from Georgia

This article examines the importance of landholdings in explaining income inequality among family farms in four districts in Georgia following the land reform of the 1990s. Income inequality is decomposed by sources of income and by determinants of income. The results indicate that farm income is a disequalizing source of income among family farms in these districts. In addition, a uniform increase in landholding is expected to reduce income inequality. Combining the two results, we conclude that the impact of land reform on farm household income inequality depends on the resulting distribution of landholdings. It can reduce inequality if land is distributed relatively equally, but inequality can increase if the wealthier farmers are able to gain control of more (and perhaps better) land resources. A possible implication of this result is that for land reform to be equalizing, distributing land to smallholders should be accompanied by additional policies and regulations supporting small farmers, such as land titling and registration, support for cooperation, and access to credit and other market services.

Unravelling Income Inequality in Indonesia

This study aims to analyze the effect of Information and Communication Technology (ICT) on income inequality in Indonesia. The analytical method used includes linear regression to evaluate the causal relationship between the dependent variable (Gini Ratio) and ICT indicators. Furthermore, the k-means clustering algorithm is used to group provinces based on ICT characteristics. The results of the regression analysis show that the ICT variables have a significant influence on the Gini Ratio, illustrating the close relationship between ICT and income inequality. In addition, clustering produces two regional groups: Cluster 1, with better access and use of ICT, and Cluster 2, with lower ICT characteristics but advantages in telecommunication infrastructure. This research shows the importance of inclusive and sustainable ICT development to reduce income inequality in Indonesia. Appropriate policies for increasing the accessibility and use of ICTs can have a positive impact on social and economic development throughout Indonesia.

Unilateral tax policy in the open economy

This paper examines the effects of a unilateral reform of a redistributive tax-transfer system in an open economy. Compared to autarky, a tax increase leads to a smaller decline in aggregate income in the open economy, and it is also more effective at reducing income inequality, provided the tax rates are sufficiently low. Aggregating effects on income and income inequality using an Atkinson social welfare function, we find that optimal tax rates are positive in the open economy and higher than under autarky. The key mechanism is a tax-induced reduction in the market size of the reforming country relative to its trading partner, resulting in a firm selection effect towards exporting in line with a terms-of-trade improvement. From the perspective of a non-reforming trading partner, this resembles a unilateral increase in trade costs leading to a deterioration of terms of trade and a decline in aggregate real income and inequality.

Does reducing income inequality promote the decoupling of economic growth from carbon footprint?

Mitigating climate change, improving economic growth, and reducing income inequality are three of Sustainable Development Goals (17 SDGs). It has been well understood that economic growth has a significant impact on carbon footprint, but it remains unclear whether this impact will be mitigated or intensified by reducing income inequality. By applying the Multi-Regional Input-Output model, this study assesses the consumption-based carbon footprints of 43 major economies over the period 1995–2019 and conducts the corresponding empirical analysis. Through examining the moderating effect of income inequality (Gini coefficient) on the relationship between economic growth (GDP per capita) and consumption-based carbon footprint (CO2 per capita), we demonstrate that a lower Gini coefficient – a more equitable distribution of income − could significantly promote the decoupling of economic growth from carbon footprint. The results also show a heterogeneous moderating effect of income inequality – reducing income inequality in rich countries helps decouple economic growth from carbon footprint more than in poor countries. This study contributes to a better understanding of the synergy among economic growth (SDG 8), income inequality reduction (SDG 10), and carbon mitigation (SDG 13). Given that reducing income inequality in the context of economic growth can have significant benefits for carbon mitigation, we would suggest that income inequality reduction should be incorporated into climate action, particularly in rich countries.

Non-linear dynamics in finance–inequality nexus: time series evidence from the Indian economy

PurposeThe principal aim of this study is to examine the relationship between financial development and income inequality in India using the financial Kuznets curve (FKC) hypothesis.Design/methodology/approachThis study uses the autoregressive distributed lag (ARDL) model and the Toda–-Yamamoto causality test to investigate the long-run and short-run relationship and causality between financial development and income inequality. In addition, this study employs a principal component analysis (PCA) to construct a comprehensive financial development index.FindingsThe study found a long-run relationship between financial development and income inequality in India for the period under consideration. Trade is found to improve the income distribution, while inflation worsens income distribution. Moreover, the empirical results revealed a feedback causality between financial development and income inequality. The study results confirm an inverted U-shaped relationship between financial sector development indicators and income inequality, thus validating the FKC hypothesis for the Indian economy.Research limitations/implicationsThe study draws attention of the government and policymakers, urging them to focus on building a strong financial sector by improving its efficiency. This, in turn, will lead to enhanced financial stability and a reduction in income inequality. They should prioritise the development of high-quality and sustainable financial products and services to ensure the robust growth of the financial sector.Originality/valueTo the best of our knowledge, this study is the latest of its kind to empirically test the financial development on income inequality and the FKC hypothesis simultaneously for the Indian economy using financial proxy variables from financial institutions (FIs) and financial markets (FMs) for the measurement of financial depth.

Bridging the financial divide: a bibliometric analysis on the role of digital financial services within FinTech in enhancing financial inclusion and economic development

Financial technology (FinTech) and financial inclusion have become increasingly significant as means to alleviate poverty, reduce income inequality, and promote economic growth. This study presents a bibliometric analysis of research on the role of digital financial services in promoting financial access and economic development between 2010 and 2023. Using Scopus database, 695 documents were selected, and Biblioshiny and VOSviewer software were employed for analysis. The study aims to identify research themes, analyze publication trends, assess geographical distribution, recognize influential authors, institutions, and journals, uncover highly cited articles, and determine research gaps. The results reveal a growing interdisciplinary interest in FinTech and financial inclusion, with a surge in research production since 2016, emphasizing the significance of digital financial services in addressing the limitations of traditional financial institutions. The findings also highlight influential authors, institutions, and publications that have shaped the discourse, global collaboration patterns, and emerging research themes and trends. Policymakers are encouraged to foster an environment conducive to the growth and integration of FinTech, while future research directions should focus on the impact of digital financial services on vulnerable populations, alternative financing solutions, and the potential of emerging technologies in advancing financial inclusion and economic development. This analysis underscores the importance of interdisciplinary collaboration, global cooperation, and vigilance in addressing the challenges and opportunities presented by the rapid adoption of digital financial services in promoting inclusive and sustainable economic development.

Fiscal Transfer Policies and Road Infrastructure Reduce Income Inequality in Rural-Urban Areas

Fiscal transfer policies and road infrastructure are essential in reducing inequality in Indonesia. However, previous research examining the effect of fiscal transfer policies and road infrastructure still came up with inconclusive findings, thus making it necessary to conduct further research on rural, urban, and sub-national areas in Indonesia. This study examines the impact of fiscal transfer policies and road infrastructure on reducing income inequality in rural, urban, and sub-national areas. The authors utilized time-series data from 2012 to 2021 and 34 provinces. The fixed effect GLS model showed that Kuznets' hypothesis existed at rural, urban, and sub-national levels. The results also showed that the special allocations fund significantly reduced income inequality in rural, urban, and sub-national areas. However, road infrastructure was significant only in urban areas. The findings suggest that the special allocation fund policy can be expanded in scope and increased in number to accelerate the reduction in income inequality.JEL Classification: O15, L92, O18, O23

Impact of Minimum Wage Policy on Income Inequality: Azerbaijan Case

The effects of the minimum wage on income inequality in households were assessed in the article, by using the differences-in-differences method. The authors claim that since the minimum wage in Azerbaijan is much lower than the average wage, as well as because the number of waged (and salaried) employees has a small share in the total employment, the impact of the minimum wage on the total income of households is not felt. However, such an effect can be observed in the income inequality of low-income families. The authors suggest that the minimum wage should be closer to the average wage and the level of self-employment in the country should decrease. This can lead to a reduction in income inequality between households.

Financial inclusion and income inequality in developing countries: The role of aging populations

This paper investigates how financial inclusion impacts income inequality by considering the role of an aging population as a moderator in 73 developing countries from 2004 to 2019. The generalized method of moments (GMM) estimator results reveal that financial inclusion and an aging population are insignificant determinants of income inequality. Nevertheless, the interaction effect between both variables on income inequality is substantial in these countries. Meanwhile, the empirical findings of a panel quantile regression indicate that financial inclusion and an aging population are significant determinants of reducing income inequality at low quantile levels. The aging population is essential in moderating the relationship between financial inclusion and income inequality, especially in increasing the income gap when countries’ inequality is lower; however, the coefficient values showed a downward-sloping trend toward high quantiles.

The relationship of economic growth, income inequality and poverty: a study on developing countries

This study aims to examine the relationship between income inequality, poverty and economic growth in selected eight developing countries determined by the World Bank's Atlas method between 2000 and 2020. The problem of the study is the increasing and deepening income inequality and poverty in developing countries in recent years. In this context, panel data analysis was chosen to reveal the relationship between income inequality, poverty and economic growth in developing countries, and a wide data set such as gini coefficient, head number index, per capita national income, democracy index, human development index and misery index was used. Income inequality, poverty and economic growth were analyzed with three different models) and compared with each other. Considering the results of the analysis, the Durbin-Hausman cointegration test was conducted to reveal the existence of a long-term relationship between the variables, and the existence of a long-term cointegration relationship between the variables was determined. According to the results of Dumitrescu Hurlin causality test, a bidirectional causality relationship was found between the variables. According to panel regression analysis, it was determined that while per capita increases in national income increase income inequalities, increases in democracy and per capita income reduce poverty, and increases in democracy index increase per capita income. According to the results, various social, economic and political policies have been proposed to reduce income inequality and poverty and increase economic growth.

Use of Theil for a Specific Duality Economy: Assessing the Impact of Digital Inclusive Finance on Urban-Rural Income Gap in Chongqing

This study uses panel data from 2016 to 2020 to examine the impact of digital financial inclusion on income inequality in the urban-rural divide of Chongqing, China. The results suggest that increasing access to digital financial services could help narrow the income gap between urban and rural areas. However, the impact becomes significantly positive when controlling for other variables with the Random Effects regression model. Among the control variables, the urbanization rate and government expenditure are found to be significant determinants of income inequality in Chongqing. These findings offer insights for policymakers on the potential benefits of targeted interventions to promote financial inclusion and sustainable urbanization, while ensuring effective allocation of government spending to reduce income inequality.

Income inequality and ‘hospitalisations of despair’ in Canada: a study on longitudinal, population-based data

BackgroundRates of drug overdoses, alcohol-related liver disease and suicide attempts represent a major public health burden in Canada. While the existing literature does highlight some evidence of association between income...

Income inequality and rule-systems within public transport: A study of Medellín (Colombia) and Santiago (Chile)

The objectives of reducing income inequality and providing sustainable transport systems are part of the Sustainable Development Goals and are inter-related. On the one hand, income distribution influences transport decisions and accessibility. On the other hand, transport can be a source of redistribution by facilitating access to opportunities, and by being a target for public spending. Yet, two schools of economic thought, neoclassical economics and institutionalist political economy, expect contrasting effects of income inequality on public transport demand and supply. This research empirically explores how income inequality at the city level is linked to socioeconomic distribution of supply and satisfied demand. The article compares two highly income-unequal Latin American cities: Santiago (Chile) and Medellín (Colombia). Both quantitative descriptive analyses and qualitative semi-structured interviews are used to analyse the cases. Aligned with subjective perceptions captured in interviews, the quantitative results show that, although both cities have similar income distributions, allocation of supply and satisfied demand among income groups is different. One of the most notable achievements of Medellín is to avoid socioeconomic segregation between buses and the metro network, as it occurs in Santiago and other cities studied by the literature. Furthermore, the analysis highlights unwritten rule-systems, or informal institutions, that influence income distribution within public transport.

Does population aging coexist with income inequality in the long run? Evidence from selected Asia-Pacific countries

Advanced countries have experienced a general rise in income inequality, whereas the outlook for income inequality in developing countries is mixed. As such, reduction in income inequality continues to be an important socio-economic development goal in many countries in the twenty-first century. Furthermore, it remains unclear whether the slow progress in reducing income inequality is a manifestation of the prevailing aging population. Using a sample of countries that are currently considered aging, aged, and super-aged countries in the Asia-Pacific region, the paper empirically examines whether a long-run nexus exists between population aging and income inequality. The methodology adopted includes the augmented autoregressive distributed lag (A-ARDL) bounds test. The key results show that aging and income inequality have a long-run relationship among aged and super-aged countries. In contrast, recently graying countries show no evidence of cointegration due to their relatively early transition to aging. Some other control variables also reveal a significant impact on income inequality. Increases in the real gross domestic product per capita worsen the income distribution, but higher government expenditure can help moderate income inequality. In light of rapid population aging, the findings are useful for policy makers in designing and targeting appropriate socioeconomic policies to help mitigate income inequality in the long run based on the intensity of the share of the elderly population in the countries studied.

Kicking the Ladder or Not? Unraveling Income Inequality Perceptions in the World

This research aims to explore the factors influencing support for income equality at both the individual and macro levels worldwide. By analyzing the latest data from the World Values Survey, which includes responses from 50,615 individuals across 42 countries, and incorporating key macroeconomic variables obtained from the World Bank, this study identifies several crucial determinants of attitudes towards addressing income inequality using logistic regression analysis. The research findings reveal that factors such as material well-being, life satisfaction, institutional trust, job status, place of residence, level of education, and religiosity play a significant role in shaping individual perceptions of income inequality, particularly in the context of support for either support for redistributive policy or free-market capitalism as potential solutions to mitigate income disparities. Additionally, macro-level variables reveal a substantial influence on support for income equality. Income per capita, income share of the top 10, the unemployment rate, and women's representation in parliament as a proxy for gender equality are found to significantly increase the likelihood of endorsing efforts to reduce income inequality. Our results remain robust when controlling for alternative income-related variables.

How Much Financial Development Accentuates Income Inequality in Central and Eastern European Countries?

Financial development is often associated with significant economic growth, but studies have shown that a high level of financial development can be the cause of deepening income inequality in many countries. The main objective of the proposed study is to identify to what extent financial development influences income inequality in Central and Eastern European Countries (CEEC). Thus, for the model specification we used as dependent variable the Gini coefficient and as independent variable the financial development index. The sample period for the analysis was from 2004 to 2019, restricted by the lack of data on the Gini coefficient in CEECs. Data on the financial development index were collected from International Monetary Fund, and data on the Gini coefficient were extracted from the World Bank’s Poverty and Inequality Platform. The study unravels several contributions. First of all, the use of quantile regression allowed for the examination of the effects of financial development across the entire distribution of income inequality. Second of all, the use of a comprehensive financial development index offered a more robust and comprehensive measure of financial development compared to single indicators. Taking into account that the Gini coefficient must be close to zero, this result was a positive one with, in essence, financial development reducing income inequality in CEECs. Thirdly, the specific focus on CEECs fills a gap in the literature. Finally, the findings of this study have important policy implications. The obtained results indicate a negative causal relationship between financial development and income inequality, emphasizing the fact that the relationship between these two components cannot be generalized for all regions. These might include measures to promote financial inclusion, improve financial literacy, and enhance the stability and efficiency of financial systems. Supporting financial development in CEECs and similar transition economies can be an effective strategy for tackling income inequality.

Health, economic growth, and Gini index in North America using a panel model

Objective: The objective of this paper is assessed the nexus among health status, economic growth, and the Gini index in North America and its countries using a panel model. Materials and Method: The materials consist of annual data regarding life expectancy, government health expenditure as percentage of the gross domestic product, Gini index, and gross domestic product at constant 2015 US$ for the period 2000-2019. The method applies a panel model for North America and its three countries: Canada, Mexico and The United States. North America diversity treatment among countries is dealt with fixed and random effects. Results: North America inhabitants health status are negatively influenced by an increasing income inequality, and a reduction on economic growth. The country that expends more in health care is The United States, follow by Canada and Mexico. The biggest reduction on life expectancy from an increase in income inequality is in The United States, followed by Canada and Mexico. Life expectancy increases when Canada and The United States experience economic growth. The countries with inarticulate health policy responses to an increase in income inequality are first Mexico followed by The United States. Conclusions: In North America and its countries an increasing income inequality reduces life expectancy, and government health expenditure. Economic growth benefits life expectancy and government health expenditure. Health status seems to improve with a reduction in income inequality and a greater public health expenditure. Therefore, policies that increases income inequality and reduces public health expenditure seems to be advocates of a reduction: in health status, population welfare and economic growth.