New evidence on determinants of income inequality
- Authors
- Shin, K.; Shin, D.
- Issue Date
- 2013
- Keywords
- Financial openness; Income inequality; Technological progress; Trade openness
- Citation
- Journal of Economic Theory and Econometrics, v.24, no.2, pp.125 - 162
- Indexed
- SCOPUS
KCI
- Journal Title
- Journal of Economic Theory and Econometrics
- Volume
- 24
- Number
- 2
- Start Page
- 125
- End Page
- 162
- URI
- https://scholar.korea.ac.kr/handle/2021.sw.korea/105891
- ISSN
- 1229-2893
- Abstract
- This paper investigates determinants of income inequality. To refect that income distribution underwent structural changes recently, we analyze various inequality measures: the Gini coefficient, the Estimated Household Income Inequality (EHII) index, and the income share of the top 1 percent. Analysis of country-level panel data suggests that, contrary to the Kuznetz hypothesis, income inequality has worsened recently among developed countries, which is more evident in the income share of the top 1%. The apparent negative effects of trade openness on income inequality are explained by other control variables, and the negative impact of financial openness is observed when the top 1 percent is analyzed. Technological progress is positively associated with income inequality, as measured by the Gini or the top 1 percent, but not the EHII. It is also found that, while income inequality worsens in the degree to which individuals can participate in the political process of their country, it is reduced by expanded government expenditures.
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