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Roots of Inequality

Author

Listed:
  • Oded Galor
  • Marc Klemp
  • Daniel C. Wainstock

Abstract

Why does inequality vary across societies? Why are some societies more unequal than others? We advance the hypothesis that in a market economy, where income differentials reflect variations in productive traits, a significant share of cross-societal differences in inequality may reflect enduring variation in the degree of diversity within societies, rooted in the prehistoric Out-of-Africa migration. Patterns of inequality within the U.S. population are consistent with this hypothesis, suggesting that disparities among groups originating from different ancestral societies may be related to the degree of diversity within those societies, shaped during humanity's dispersal from Africa. Consistent with the proposed mechanism, populations whose ancestors originated closer to East Africa tend to exhibit greater dispersion in productive traits-education, ability, and labor supply-channels that appear to mediate the relationship between diversity and inequality.

Suggested Citation

  • Oded Galor & Marc Klemp & Daniel C. Wainstock, 2025. "Roots of Inequality," RFBerlin Discussion Paper Series 2552, ROCKWOOL Foundation Berlin (RFBerlin).
    • Handle: RePEc:crm:wpaper:2552
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    Cited by:

    1. is not listed on IDEAS
    2. Bertoli, Simone & Clerc, Melchior & Loper, Jordan & Roca Fernández, Èric, 2025. "Migration and the epidemiological approach: Time and self-selection into foreign ancestries matter," Journal of Development Economics, Elsevier, vol. 176(C).
    3. Galor, Oded, 2024. "Unified Growth Theory: Engines of Growth and Inequality in the Wealth of Nations," IZA Discussion Papers 17491, Institute of Labor Economics (IZA).

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    Keywords

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    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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