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The short-run relationship between inequality and growth: evidence from OECD regions during the Great Recession

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  • Vicente Royuela
  • Paolo Veneri
  • Raul Ramos

Abstract

This paper provides evidence on the relationship between income inequality and economic growth in Organisation for Economic Co-operation and Development (OECD) regions during the decade 2003–13. It combines household survey data and macroeconomic databases, covering over 200 comparable regions in 15 OECD countries. The econometric results, based on two alternative sets of instruments, highlight a general negative association between inequalities and economic growth since the start of the economic crisis. This relationship is sensitive to the type of urban structure. Higher inequalities seem to be more detrimental for growth in regions characterized by medium to large-sized cities, while regions characterized by small cities and rural areas are less affected.

Suggested Citation

  • Vicente Royuela & Paolo Veneri & Raul Ramos, 2019. "The short-run relationship between inequality and growth: evidence from OECD regions during the Great Recession," Regional Studies, Taylor & Francis Journals, vol. 53(4), pages 574-586, April.
    • Handle: RePEc:taf:regstd:v:53:y:2019:i:4:p:574-586
    DOI: 10.1080/00343404.2018.1476752
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    Cited by:

    1. Luigi Mastronardi & Aurora Cavallo, 2020. "The Spatial Dimension of Income Inequality: An Analysis at Municipal Level," Sustainability, MDPI, vol. 12(4), pages 1-18, February.
    2. Michael Christl & Silvia De Poli & Monika Köppl-Turyna, 2024. "Does redistribution hurt growth? An Empirical Assessment of the Redistribution-Growth Relationship in the European Union," Working Papers 668, ECINEQ, Society for the Study of Economic Inequality.
    3. Javier Barbero & Ernesto Rodríguez-Crespo, 2022. "Technological, institutional, and geographical peripheries: regional development and risk of poverty in the European regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 69(2), pages 311-332, October.
    4. David Castells‐Quintana & Vicente Royuela & Paolo Veneri, 2020. "Inequality and city size: An analysis for OECD functional urban areas," Papers in Regional Science, Wiley Blackwell, vol. 99(4), pages 1045-1064, August.
    5. Ibolya Török & József Benedek & Manuel Gómez-Zaldívar, 2022. "Quantifying Subnational Economic Complexity: Evidence from Romania," Sustainability, MDPI, vol. 14(17), pages 1-22, August.
    6. Luca Romagnoli & Paola Di Renzo & Luigi Mastronardi, 2022. "Modelling Income Drivers in Peripheral Municipalities: The Case of Italian Inner Areas," Sustainability, MDPI, vol. 14(22), pages 1-16, November.
    7. Köppl-Turyna, Monika & Christl, Michael & De Poli, Silvia, 2024. "Does redistribution hurt growth? An empirical assessment of the redistribution-growth relationship in the European Union," Research Papers 27, EcoAustria – Institute for Economic Research.
    8. Fabian Geelhoedt & Vicente Royuela & David Castells-Quintana, 2021. "Inequality and Employment Resilience: An Analysis of Spanish Municipalities during the Great Recession," International Regional Science Review, , vol. 44(1), pages 113-141, January.
    9. Mdingi, Kholeka & Ho, Sin-Yu, 2023. "Income inequality and economic growth: An empirical investigation in South Africa," MPRA Paper 117733, University Library of Munich, Germany.
    10. Panagiotis Artelaris, 2021. "Regional economic growth and inequality in Greece," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(1), pages 141-158, February.
    11. Tuğba AKIN & Kıymet YAVUZASLAN, 2019. "The effects of demographic structures on savings in Eastern European countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 10, pages 93-114, June.
    12. Luisa Alamá-Sabater & Yolanda de Llanos & Miguel Ángel Márquez & Emili Tortosa-Ausina, 2023. "Evaluating the spatial mismatch between population and factor endowments: The case of the European Union," Working Papers 2023/06, Economics Department, Universitat Jaume I, Castellón (Spain).
    13. Beatriz Larraz & Jose M. Pavía & Marcos Herrera‐Gómez, 2021. "Spatial aggregation and resampling expansion of big surveys: An analysis of wage inequality," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(3), pages 957-981, June.

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