An Assessment of Relationship Between Growth and Inequality Using Micro Data from Thailand
AbstractApplying comprehensive decomposition analyses to the micro data from Thailand, this paper shows that growth and income distribution dynamics are closely linked through occupation, financial intermediation, and education. The compositional change of these characteristics accounts for more than half of the Thai inequality increase while it contributed to nearly forty percent of the Thai growth and poverty reduction between 1976 and 1996, which not only validates the empirical importance of the relationship between growth and income inequality that Kuznets (1955) speculated on, but also identifies the key factors through which they are linked. This study thus lays a cornerstone on the works searching for the relevant specification of underlying mechanisms of growth and inequality and the scope of potential policies for equity-enhancing growth. The orders of magnitudes of the compositional effects on growth are similar over these characteristics but their effects on income distribution dynamics sharply contrast. Financial deepening and educational expansion contributed to increase in inequality while occupational transformation did not so much contributed to inequality increase as to poverty alleviation. However, the effect of diverging income levels across income-status groups on inequality is most remarkable via occupation, suggesting the importance of a rise in skill premia on inequality dynamics along growth, which is the main factor together with the occupational transformation that shapes the aggregate inequality dynamics along growth as an inverted-U curve.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Northwestern University/University of Chicago Joint Center for Poverty Research in its series JCPR Working Papers with number 244.
Date of creation: 15 Nov 2001
Date of revision:
Contact details of provider:
Postal: Harris Graduate School of Public Policy Studies, 1155 E. 60th Street Chicago, IL 60637
Web page: http://www.jcpr.org/wp/ByDate.html
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-DEV-2001-12-19 (Development)
- NEP-MAC-2001-12-04 (Macroeconomics)
- NEP-TID-2001-12-19 (Technology & Industrial Dynamics)
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.:
- Alberto Alesina & Dani Rodrik, 1991.
"Distributive Politics and Economic Growth,"
NBER Working Papers
3668, National Bureau of Economic Research, Inc.
- Per Krusell & Lee E. Ohanian & Jose-Victor Rios-Rull & Giovanni L. Violante, 1997.
"Capital-skill complementarity and inequality: a macroeconomic analysis,"
239, Federal Reserve Bank of Minneapolis.
- Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000. "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis," Econometrica, Econometric Society, vol. 68(5), pages 1029-1054, September.
- Ahluwalia, Montek S., 1976. "Inequality, poverty and development," Journal of Development Economics, Elsevier, vol. 3(4), pages 307-342, December.
- Anand, Sudhir & Kanbur, S. M. R., 1993. "The Kuznets process and the inequality--development relationship," Journal of Development Economics, Elsevier, vol. 40(1), pages 25-52, February.
- Dan Bernhardt & Huw Lloyd-Ellis, 1993.
"Enterprise, Inequality and Economic Development,"
893, Queen's University, Department of Economics.
- Mookherjee, Dilip & Shorrocks, Anthony F, 1982. "A Decomposition Analysis of the Trend in UK Income Inequality," Economic Journal, Royal Economic Society, vol. 92(368), pages 886-902, December.
- Saith, Ashwani, 1983. "Development and distribution : A critique of the cross-country U-hypothesis," Journal of Development Economics, Elsevier, vol. 13(3), pages 367-382, December.
- Banerjee, Abhijit V & Duflo, Esther, 2003.
" Inequality and Growth: What Can the Data Say?,"
Journal of Economic Growth,
Springer, vol. 8(3), pages 267-99, September.
- Galor, Oded & Zeira, Joseph, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Wiley Blackwell, vol. 60(1), pages 35-52, January.
- Greenwood, J. & Jovanovic, B., 1988.
"Financial Development, Growth, And The Distribution Of Income,"
RCER Working Papers
131, University of Rochester - Center for Economic Research (RCER).
- Greenwood, Jeremy & Jovanovic, Boyan, 1990. "Financial Development, Growth, and the Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1076-1107, October.
- Jeremy Greenwood & Boyan Jovanovic, 1989. "Financial Development, Growth, and the Distribution of Income," NBER Working Papers 3189, National Bureau of Economic Research, Inc.
- Greenwood, Jeremy & Jovanovic, Boyan, 1988. "Financial Development, Growth, And The Distribution Of Income," Working Papers 88-12, C.V. Starr Center for Applied Economics, New York University.
- Greenwood, J. & Jovanovic, B., 1990. "Financial Development, Growth, And The Distribution Of Income," University of Western Ontario, The Centre for the Study of International Economic Relations Working Papers 9002, University of Western Ontario, The Centre for the Study of International Economic Relations.
- Knight, J B & Sabot, R H, 1983. "Educational Expansion and the Kuznets Effect," American Economic Review, American Economic Association, vol. 73(5), pages 1132-36, December.
- 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.
- Dasgupta, Partha & Sen, Amartya & Starrett, David, 1973. "Notes on the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 6(2), pages 180-187, April.
- Villasenor, JoseA. & Arnold, Barry C., 1989. "Elliptical Lorenz curves," Journal of Econometrics, Elsevier, vol. 40(2), pages 327-338, February.
- Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
- Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
- Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September.
- Lindert, Peter H, 1986. "Unequal English Wealth since 1670," Journal of Political Economy, University of Chicago Press, vol. 94(6), pages 1127-62, December.
- Banerjee, Abhijit V & Newman, Andrew F, 1993.
"Occupational Choice and the Process of Development,"
Journal of Political Economy,
University of Chicago Press, vol. 101(2), pages 274-98, April.
- Abhijit V. Banerjee & Andrew F. Newman, 1990. "Occupational Choice and the Process of Development," Discussion Papers 911, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Robert J. Barro, 1999. "Inequality, Growth, and Investment," NBER Working Papers 7038, National Bureau of Economic Research, Inc.
- Ravallion, M. & Datt, G., 1991. "Growth and Redistribution Components of Changes in Poverty Measures," Papers 83, World Bank - Living Standards Measurement.
- Wolfson, Michael C, 1994. "When Inequalities Diverge," American Economic Review, American Economic Association, vol. 84(2), pages 353-58, May.
- 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.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel).
If references are entirely missing, you can add them using this form.