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The Economic Development-Income Inequality Nexus

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  • Tomson Ogwang

Abstract

type="main" xml:lang="en"> Abstract. The empirical status of Kuznets' U-curve hypothesis is reassessed using three indicators of development; two of which incorporate Basic Human Needs performance yardsticks, and three measures of income inequality. To eliminate the potential bias of the results due to functional form misspecification, a quadratic Box-Cox model of income inequality is specified. When the full sample of developed and developing countries was considered, all the share equations provided strong support for the hypothesis whereas the Gini equations provided weak support irrespective of the measure of development used. The results for the sub sample of developing countries were generally similar to those for the full sample. The policy implications of these results are discussed.

Suggested Citation

  • Tomson Ogwang, 1995. "The Economic Development-Income Inequality Nexus," American Journal of Economics and Sociology, Wiley Blackwell, vol. 54(2), pages 217-229, April.
  • Handle: RePEc:bla:ajecsc:v:54:y:1995:i:2:p:217-229
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    File URL: http://hdl.handle.net/10.1111/j.1536-7150.1995.tb02695.x
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    References listed on IDEAS

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    1. Saith, A., 1983. "Development and distribution : a critique of the cross-country U-hypothesis," ISS Working Papers - General Series 18763, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    2. Ram, Rati, 1988. "Economic development and income inequality: Further evidence on the U-curve hypothesis," World Development, Elsevier, vol. 16(11), pages 1371-1376, November.
    3. 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.
    4. Papanek, Gustav F. & Kyn, Oldrich, 1986. "The effect on income distribution of development, the growth rate and economic strategy," Journal of Development Economics, Elsevier, vol. 23(1), pages 55-65, September.
    5. Hicks, Norman & Streeten, Paul, 1979. "Indicators of development: The search for a basic needs yardstick," World Development, Elsevier, vol. 7(6), pages 567-580, June.
    6. Ahluwalia, Montek S, 1976. "Income Distribution and Development: Some Stylized Facts," American Economic Review, American Economic Association, vol. 66(2), pages 128-135, May.
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    Cited by:

    1. Djoni Hartono & Tony Irawan, 2008. "Decentralization Policy and Equality: A Theil Analysis of Indonesian Income Inequality," Working Papers in Economics and Development Studies (WoPEDS) 200810, Department of Economics, Padjadjaran University, revised Oct 2008.
    2. Thomas, Vinod & Wang, Yan & Fan, Xibo, 2001. "Measuring education inequality - Gini coefficients of education," Policy Research Working Paper Series 2525, The World Bank.
    3. Joël Hellier & Stéphane Lambrecht, 2012. "Inequality, growth and welfare: The main links," Working Papers 258, ECINEQ, Society for the Study of Economic Inequality.
    4. Schwartz, Gerd & Ter-Minassian, Teresa, 2000. " The Distributional Effects of Public Expenditure," Journal of Economic Surveys, Wiley Blackwell, vol. 14(3), pages 337-358, July.

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