Five decades ago, Simon Kuznets expressed an important hypothesis about the relationship between the degree of income inequality within a country and its level of economic development: the Kuznets’s inverted-U hypothesis. The lack of longitudinal data has forced the use of cross-section or pooled datasets in order to draw conclusions about that relationship. In the present note we highlight the lack of international comparability of surveys where the measures of inequality are based, and we show two main findings: 1) data comparability goes on constituting a problem, particularly in what respects to the different welfare indicators used in national surveys, and 2) the procedure usually used to minimize the problem of noncomparability is likely to enforce the bias rather than to solve it.
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Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number
267.
Find related papers by JEL classification: C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
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