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An Empirical Note on Economic Freedom and Income Inequality

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  • John Carter

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    Abstract

    I report estimates for a fixed-effects model of country-level Gini coefficients as a function of economic freedom along with relevant control variables. Gini coefficients are drawn from the UNU/WIDER World Income Inequality Database Version 2.0a, while economic freedom is measured by the Fraser Institute's Economic Freedom of the World index. Controls are included for per capita income, political structure, education, demographics, and industrial composition. Over a broad range of freedom, the estimated relation between economic freedom and income inequality is positive, statistically significant, but relatively inelastic. Copyright Springer Science + Business Media B.V. 2007

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    File URL: http://hdl.handle.net/10.1007/s11127-006-9078-0
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    Bibliographic Info

    Article provided by Springer in its journal Public Choice.

    Volume (Year): 130 (2007)
    Issue (Month): 1 (January)
    Pages: 163-177

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    Handle: RePEc:kap:pubcho:v:130:y:2007:i:1:p:163-177

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    Web page: http://www.springerlink.com/link.asp?id=100332

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    Keywords: Economic freedom; Income inequality; Gini coefficient; Equality; Tradeoff; Country panel;

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    1. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment: Updates and Implications," CID Working Papers 42, Center for International Development at Harvard University.
    2. Adrian Wood, 1995. "How Trade Hurt Unskilled Workers," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 57-80, Summer.
    3. Andrea Brandolini & Anthony B. Atkinson, 2001. "Promise and Pitfalls in the Use of "Secondary" Data-Sets: Income Inequality in OECD Countries As a Case Study," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 771-799, September.
    4. Haan, Jakob de & Sturm, Jan-Egbert, 1999. "On the relationship between economic freedom and economic growth," CCSO Working Papers 199903, University of Groningen, CCSO Centre for Economic Research.
    5. Klaus Deininger & Lyn Squire, 1996. "A New Data Set Measuring Income Inequality," CEMA Working Papers 512, China Economics and Management Academy, Central University of Finance and Economics.
    6. Berggren, Niclas, 1999. " Economic Freedom and Equality: Friends or Foes?," Public Choice, Springer, vol. 100(3-4), pages 203-23, September.
    7. Hongyi Li & Lyn Squire & Tao Zhang & Heng-fu Zou, 1999. "A Data Set on Income Distribution," CEMA Working Papers 575, China Economics and Management Academy, Central University of Finance and Economics.
    8. Mathias Thoenig & Thierry Verdier, 2003. "A Theory of Defensive Skill-Biased Innovation and Globalization," American Economic Review, American Economic Association, vol. 93(3), pages 709-728, June.
    9. repec:wbk:wbpubs:12426 is not listed on IDEAS
    10. Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053.
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    Cited by:
    1. Bergh, Andreas & Nilsson, Therese, 2010. "Do liberalization and globalization increase income inequality?," European Journal of Political Economy, Elsevier, vol. 26(4), pages 488-505, December.
    2. Joshua Hall, 2013. "Joseph Shaanan: Economic freedom and the American dream," Public Choice, Springer, vol. 155(3), pages 565-567, June.
    3. Kristina Nyström, 2008. "The institutions of economic freedom and entrepreneurship: evidence from panel data," Public Choice, Springer, vol. 136(3), pages 269-282, September.

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