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Convergence in income distributions: Evidence from a panel of countries

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  • Chambers, Dustin
  • Dhongde, Shatakshee

Abstract

There is growing evidence that countries' income distributions have changed significantly since globalization accelerated in the early 1990s. Using a large panel of Gini indices covering 81 countries between 1990 and 2010, we find strong evidence that inequality declined in nations that were initially highly unequal, while inequality increased in nations with initially low inequality. This pattern holds for both developed and developing countries, but developed countries' relative income distributions have converged at a more rapid pace. These findings are robust to the method of estimation, level of economic development, time horizon, data source or measure of inequality. Our results suggest that income distributions in countries are becoming increasingly unequal yet more similar to each other. Consequently, countries are beginning to coordinate their strategies to jointly reduce inequality through initiatives such as the United Nations' Sustainable Development Goals.

Suggested Citation

  • Chambers, Dustin & Dhongde, Shatakshee, 2016. "Convergence in income distributions: Evidence from a panel of countries," Economic Modelling, Elsevier, vol. 59(C), pages 262-270.
  • Handle: RePEc:eee:ecmode:v:59:y:2016:i:c:p:262-270
    DOI: 10.1016/j.econmod.2016.07.019
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    2. Ioannis Bournakis & Mona Said & Antonio Savoia & Francesco Savoia, 2020. "Patterns of Regional Income Inequality in Egypt: Implications for Sustainable Development Goal 10," LIS Working papers 798, LIS Cross-National Data Center in Luxembourg.
    3. Francesco Savoia, 2019. "Income Inequality Convergence Across EU Regions," LIS Working papers 760, LIS Cross-National Data Center in Luxembourg.
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    5. Kvedaras, Virmantas & Cseres-Gergely, Zsombor, 2020. "Convergence of income distributions: Total and inequality-affecting changes in the EU," Economics Letters, Elsevier, vol. 188(C).

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    More about this item

    Keywords

    Beta convergence; Cross-country; Gini index; Income distribution; Inequality; Panel;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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