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An Econometric Analysis of the Links Between Income Inequality and Economic Growth

Author

Listed:
  • Yohannes G. Hailu

    (Michigan State University)

  • Tesfa G. Gebremedhin

    (West Virginia University)

  • Randall W. Jackson

    (West Virginia University)

Abstract

This study investigates temporal demographic changes and income inequalities, and more importantly the relationship between income inequality and economic growth inWest Virginia. Departing from earlier studies, a regional growth model is utilized and empirically tested using county level West Virginia data (1990-2000). Results suggest that per-capita income change is positively related to population and employment changes but negatively related to income inequality. This empirical evidence indicates that higher income inequality can potentially hinder economic growth.

Suggested Citation

  • Yohannes G. Hailu & Tesfa G. Gebremedhin & Randall W. Jackson, 2009. "An Econometric Analysis of the Links Between Income Inequality and Economic Growth," Journal of Income Distribution, Ad libros publications inc., vol. 18(1), pages 130-145, March.
    • Handle: RePEc:jid:journl:y:2009:v:18:i:1:p:130-145
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    More about this item

    Keywords

    income inequality; economic growth; Gini coefficient; growth modeling; population change; per-capita income;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy

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