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Level of Economic Development and Income Inequality: Evidence from the Postwar Developed World

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  • Rati Ram

Abstract

Using a recent high‐quality panel dataset on income distribution for 19 developed countries, the postwar relation between the level of economic development and income inequality is estimated in terms of several Kuznets‐type specifications. Contrary to what one might expect on the basis of Kuznets's hypothesis, inequality does not decline with an increase in income even at such high levels of development, but shows an uninverted‐U pattern that is characterized by an initial decline and a subsequent increase in income inequality. The estimates suggest that the position noted for the postwar United States is shared widely in the developed world.

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  • Rati Ram, 1997. "Level of Economic Development and Income Inequality: Evidence from the Postwar Developed World," Southern Economic Journal, John Wiley & Sons, vol. 64(2), pages 576-583, October.
    • Handle: RePEc:wly:soecon:v:64:y:1997:i:2:p:576-583
    DOI: 10.1002/j.2325-8012.1997.tb00075.x
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