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The Kuznets Curve and the Impact of Various Income Sources on the Link Between Inequality and Development

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  • Joseph Deutsch

    ()
    (Department of Economics, Bar Ilan University)

  • Jacques Silber

    ()
    (Department of Economics, Bar Ilan University)

Abstract

To understand the process described by the Kuznets curve a decomposition of the Gini Index by income sources is used that emphasizes the role of three components measuring the impact of the shares of the sources, the degree to which they are unequally distributed and their correlation with total income. The rising section of the Kuznets curve is mainly the consequence of the increasing share of wages while the declining section is related to the declining share of entrepreneurial income and the negative correlation between transfers and total income. The data sources were provided by the International Labour Office.

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Paper provided by Department of Economics, Bar-Ilan University in its series Working Papers with number 2001-03.

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Date of creation: Feb 2001
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Handle: RePEc:biu:wpaper:2001-03

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  1. Bourguignon, F. & Morrisson, C., 1989. "Income Distribution, Development and Foreign Trade: A Cross-Sectional Analysis," DELTA Working Papers 89-05, DELTA (Ecole normale supérieure).
  2. List, John A & Gallet, Craig A, 1999. "The Kuznets Curve: What Happens after the Inverted-U?," Review of Development Economics, Wiley Blackwell, vol. 3(2), pages 200-206, June.
  3. Robinson, Sherman, 1976. "A Note on the U Hypothesis Relating Income Inequality and Economic Development," American Economic Review, American Economic Association, vol. 66(3), pages 437-40, June.
  4. Dahan, Momi & Tsiddon, Daniel, 1998. " Demographic Transition, Income Distribution, and Economic Growth," Journal of Economic Growth, Springer, vol. 3(1), pages 29-52, March.
  5. Saint-Paul, Gilles & Verdier, Thierry, 1992. "Education, Democracy and Growth," CEPR Discussion Papers 613, C.E.P.R. Discussion Papers.
  6. Yves Flückiger & Jacques Silber, 1995. "Income Inequality Decomposition by Income Source and the Breakdown of Inequality Differences Between Two Population Subgroups," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 131(IV), pages 599-615, December.
  7. Galor, Oded & Tsiddon, Daniel, 1996. "Income Distribution and Growth: The Kuznets Hypothesis Revisited," Economica, London School of Economics and Political Science, vol. 63(250), pages S103-17, Suppl..
  8. Summers, Robert & Heston, Alan, 1991. "The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950-1988," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 327-68, May.
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Cited by:
  1. Furquim, Lilian & Garcia, Fernando, 2001. "Inequality and Economic Growth in Latin," Textos para discussão 104, Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).

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