Effects of Income Inequality on Aggregate Output

Brueckner, Markus; Lederman, Daniel

doi:10.1596/1813-9450-7317

Working Paper

Effects of Income Inequality on Aggregate Output

collection.link.5	https://openknowledge.worldbank.org/handle/10986/9
collection.name.5	Policy Research Working Papers
dc.contributor.author	Brueckner, Markus
dc.contributor.author	Lederman, Daniel
dc.date.accessioned	2015-07-17T16:38:47Z
dc.date.available	2015-07-17T16:38:47Z
dc.date.issued	2015-06
dc.date.lastModified	2021-04-23T14:04:07Z
dc.description.abstract	This paper estimates the effect of income inequality on real gross domestic product per capita using a panel of 104 countries during the period 1970–2010. The empirical analysis addresses endogeneity issues by using instrumental variables estimation and controlling for country and time fixed effects. The analysis finds that, on average, income inequality has a significant negative effect on transitional gross domestic product per capita growth and the long-run level of gross domestic product per capita. However, the impact varies by the level of economic development, so much so that in poor countries income inequality has a significant positive effect on gross domestic product per capita.	en
dc.identifier	http://documents.worldbank.org/curated/en/2015/06/24679226/effects-income-inequality-aggregate-output
dc.identifier.uri	http://hdl.handle.net/10986/22203
dc.language	English
dc.language.iso	en_US
dc.publisher	World Bank, Washington, DC
dc.relation.ispartofseries	Policy Research Working Paper;No. 2317
dc.rights	CC BY 3.0 IGO
dc.rights.holder	World Bank
dc.rights.uri	http://creativecommons.org/licenses/by/3.0/igo/
dc.subject	INDUSTRIALIZED COUNTRIES
dc.subject	INCOME SHARE
dc.subject	GOVERNMENT EXPENDITURES
dc.subject	ECONOMIC GROWTH
dc.subject	CAPITAL ACCUMULATION
dc.subject	INCOME
dc.subject	INDIVIDUAL COUNTRIES
dc.subject	INCOME QUINTILES
dc.subject	ECONOMETRIC MODEL
dc.subject	REAL GDP
dc.subject	GDP PER CAPITA
dc.subject	ECONOMIC REVIEW
dc.subject	DEVELOPING COUNTRIES
dc.subject	EMPIRICAL LEVEL
dc.subject	POLICY CIRCLES
dc.subject	FISCAL POLICY
dc.subject	POLICY DISCUSSIONS
dc.subject	VARIABLES
dc.subject	EMPIRICAL STUDIES
dc.subject	LAGGED VALUES
dc.subject	MARGINAL EFFECT
dc.subject	WEALTH
dc.subject	MEASURES
dc.subject	EMPIRICAL LITERATURE
dc.subject	INSTRUMENTS
dc.subject	INCOME INEQUALITY DATA
dc.subject	EMPIRICAL ANALYSIS
dc.subject	DEVELOPMENT
dc.subject	MARKET IMPERFECTIONS
dc.subject	STANDARD DEVIATION
dc.subject	EMPIRICAL RESULTS
dc.subject	DEVELOPMENT ECONOMICS
dc.subject	EDUCATIONAL ATTAINMENT
dc.subject	FOREIGN AID
dc.subject	ECONOMICS OF EDUCATION
dc.subject	DESCRIPTIVE STATISTICS
dc.subject	INCOME INEQUALITY
dc.subject	DATA QUALITY
dc.subject	SIGNIFICANCE LEVEL
dc.subject	SIGNIFICANT NEGATIVE
dc.subject	ECONOMETRICS
dc.subject	PER CAPITA GROWTH
dc.subject	GROSS DOMESTIC PRODUCT PER CAPITA
dc.subject	NEGATIVE COEFFICIENT
dc.subject	INDICATORS
dc.subject	LAND OWNERSHIP
dc.subject	PRODUCT
dc.subject	RELATIVE PRICES
dc.subject	GROSS DOMESTIC PRODUCT
dc.subject	TAXES
dc.subject	CONSUMPTION
dc.subject	HUMAN CAPITAL
dc.subject	CREDIT MARKET IMPERFECTIONS
dc.subject	EXPLANATORY VARIABLE
dc.subject	COUNTRY LEVEL
dc.subject	CAPITAL
dc.subject	ECONOMIC STUDIES
dc.subject	ESTIMATED COEFFICIENT
dc.subject	VALUE
dc.subject	DEPENDENT VARIABLE
dc.subject	LAND INEQUALITY
dc.subject	CREDIT
dc.subject	MACROECONOMICS
dc.subject	POOR COUNTRIES
dc.subject	NATIONAL INCOME
dc.subject	DYNAMIC PANEL
dc.subject	INEQUALITY DATA
dc.subject	NEGATIVE EFFECT
dc.subject	INCOME DISTRIBUTION
dc.subject	INCOMES
dc.subject	ESTIMATED COEFFICIENTS
dc.subject	AGGREGATE OUTPUT
dc.subject	ERROR TERM
dc.subject	SECONDARY SCHOOLING
dc.subject	ECONOMIC THEORY
dc.subject	ECONOMICS
dc.subject	EMPIRICAL RESEARCH
dc.subject	LAGGED DEPENDENT
dc.subject	FIXED EFFECTS
dc.subject	DATA SETS
dc.subject	ECONOMIC DEVELOPMENT
dc.subject	POSITIVE EFFECT
dc.subject	TRADE
dc.subject	RICH COUNTRIES
dc.subject	GDP
dc.subject	DATA SET
dc.subject	THEORY
dc.subject	CROSS-COUNTRY DIFFERENCES
dc.subject	WAR
dc.subject	INVESTMENT
dc.subject	INCOME SHARES
dc.subject	POVERTY
dc.subject	GINI COEFFICIENT
dc.subject	EMPIRICAL EVIDENCE
dc.subject	DISTRIBUTION OF WEALTH
dc.subject	POLICY RESEARCH
dc.subject	RISING INEQUALITY
dc.subject	POOR
dc.subject	CAPITAL INVESTMENT
dc.subject	DEVELOPMENT INDICATORS
dc.subject	INTERNATIONAL COMPARISONS
dc.subject	MIDDLE INCOME COUNTRIES
dc.subject	INEQUALITY COEFFICIENT
dc.subject	LONG RUN
dc.subject	INCOME LEVEL
dc.subject	CREDIT MARKET
dc.subject	DEVELOPMENT POLICY
dc.subject	INEQUALITY
dc.subject	GROWTH
dc.title	Effects of Income Inequality on Aggregate Output	en
dc.type	Working Paper	en
okr.date.disclosure	2015-06-22
okr.doctype	Publications & Research
okr.doctype	Publications & Research :: Policy Research Working Paper
okr.docurl	http://documents.worldbank.org/curated/en/2015/06/24679226/effects-income-inequality-aggregate-output
okr.globalpractice	Poverty
okr.googlescholar.linkpresent	yes
okr.identifier.doi	10.1596/1813-9450-7317
okr.identifier.externaldocumentum	090224b082f720f2_1_0
okr.identifier.internaldocumentum	24679226
okr.identifier.report	WPS7317
okr.language.supported	en
okr.pdfurl	http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/06/22/090224b082f720f2/1_0/Rendered/PDF/Effects0of0inc00on0aggregate0output.pdf	en
okr.region.administrative	Latin America & Caribbean
okr.topic	Poverty Reduction :: Poverty Impact Evaluation
okr.topic	Services Transfers to Poor
okr.topic	Poverty Reduction :: Pro-Poor Growth
okr.topic	Poverty Reduction :: Inequality
okr.topic	Macroeconomics and Economic Growth
okr.topic	Macroeconomics and Economic Growth :: Economic Growth
okr.topic	Macroeconomics and Economic Growth :: Economic Theory & Research
okr.unit	Office of the Chief Economist, Latin America and the Caribbean Region

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Shock Waves : Managing the Impacts of Climate Change on Poverty

World Development Report 2021 : Data for Better Lives

Shared Prosperity and Poverty Eradication in Latin America and the Caribbean

Benchmarking the Determinants of Economic Growth in Latin America and the Caribbean

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Shock Waves : Managing the Impacts of Climate Change on Poverty

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