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Income Distribution and Development

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Author Info
Frances Stewart
Abstract

Income distribution is extremely important for development, since it influences the cohesion of society, determines the extent of poverty for any given average per capita income and the poverty-reducing effects of growth, and even affects people's health. The paper reviews the connections between income distribution and economic growth. It finds that the Kuznets hypothesis that income distribution worsens as levels of income increase is not at all strongly supported by the evidence, while growth rates of income are not systematically related to changes in income distribution. However, evidence is accumulating that more equal income distribution raises economic growth. Both political and economic explanations have been advanced. The finding suggests that more equal income distribution is desirable both for equity and for promoting growth.

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Paper provided by Queen Elizabeth House, University of Oxford in its series QEH Working Papers with number qehwps37.

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Jonathan Temple, 2002. "Wage Inequality in a Dual Economy," Bristol Economics Discussion Papers 02/531, Department of Economics, University of Bristol, UK. [Downloadable!]
  2. Milanovic, Branko & Squire, Lyn, 2005. "Does tariff liberalization increase wage inequality ? - Some empirical evidence," Policy Research Working Paper Series 3571, The World Bank. [Downloadable!]
    Other versions:
  3. Bigsten , Arne & Levin, Jörgen, 2000. "Growth, Income Distribution, and Poverty: A Review," Working Papers in Economics 32, Göteborg University, Department of Economics. [Downloadable!]
  4. Joseph E. Mullat, 2003. "Judging Social Welfare Policy with the Solving of the Bargaining Problem," Game Theory and Information 0304004, EconWPA, revised 26 Apr 2003. [Downloadable!]
  5. Joseph E. Mullat, 2001. "Judging Social Welfare Policy with the Solving of the Bargaining Problem," Public Economics 0112007, EconWPA, revised 13 Jan 2004. [Downloadable!]
  6. Ananya Ghosh Dastidar, 2004. "Structural Change and Income Distribution in Developing Economies: Evidence from a Group of Asian and Latin American Countries," Working papers 121, Centre for Development Economics, Delhi School of Economics. [Downloadable!]
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