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The Effect of Urbanization and Industrialization on Income Inequality: An Analysis Based on the Method of Moments Quantile Regression

Author

Listed:
  • Ibrahim Mohamed Ali Ali
  • Imed Attiaoui
  • Rabeh Khalfaoui

    (ICN Business School)

  • Aviral Kumar Tiwari

    (Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School)

Abstract

In this study, we investigate the effects of urbanization and industrialization on income inequality within the Kuznets curve hypothesis in low-, middle- and high- income countries over the period 1990–2014. Using the method of moments quantile regression (MMQR), the study finds out mixed results about the distributional effects of both urbanization and industrialization within the three panels. In high-income countries (HIC), urbanization increases inequality from the third quantile, while industrialization reduces inequality in most low and middle quantiles and becomes insignificant in the higher quantiles. In the upper -middle income countries (UMIC), urbanization has no significant effect in low and middle quantiles but leads to a significant increase in inequality in higher quantiles. In contrast to the improvement effect of industrialization on income distribution in HIC, it rises the inequality in UMIC. The results also show that urbanization reduces inequality, while industrialization has no significant effect in all quantiles of lower -middle income countries (LMIC). We also find out evidence of the existence of an inverted Kuznets-curve relationship in both UMIC and LMIC. These different results lead to consider income level differentials between countries when examining the distributional effects of both urbanization and industrialization.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Ibrahim Mohamed Ali Ali & Imed Attiaoui & Rabeh Khalfaoui & Aviral Kumar Tiwari, 2022. "The Effect of Urbanization and Industrialization on Income Inequality: An Analysis Based on the Method of Moments Quantile Regression," Post-Print hal-03797572, HAL.
    • Handle: RePEc:hal:journl:hal-03797572
    DOI: 10.1007/s11205-021-02812-6
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    Cited by:

    1. Ponce, Pablo & Yunga, Fernando & Larrea-Silva, Jhohana & Aguirre, Nikolay, 2023. "Spatial determinants of income inequality at the global level: The role of natural resources," Resources Policy, Elsevier, vol. 84(C).
    2. Ibrahim Mohamed Ali Ali, 2023. "Income inequality, economic growth, and structural changes in Egypt: new insights from quantile cointegration approach," Economic Change and Restructuring, Springer, vol. 56(1), pages 379-407, February.
    3. Ming Gao & Fan Jiang & Jiwen Wang & Bi Wu, 2024. "Population ageing and income inequality in rural China: an 18-year analysis," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-13, December.
    4. Jiyue Li & Qian Zhang, 2025. "Economic development benefits or social inequality hinders? Intergenerational educational mobility in 49 countries," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-12, December.
    5. Kumar, Nitish & Kumar, Kundan, 2025. "Natural resources abundance and Income Inequality: Time series evidence from India," Research in Economics, Elsevier, vol. 79(1).
    6. Tiwari, Sunil & Si Mohammed, Kamel & Guesmi, Khaled, 2023. "A way forward to end energy poverty in China: Role of carbon-cutting targets and net-zero commitments," Energy Policy, Elsevier, vol. 180(C).
    7. Ibrahim Mohamed Ali Ali, 2023. "Income Inequality and Environmental Degradation in Middle-Income Countries: A Test of Two Competing Hypotheses," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 166(2), pages 299-321, April.
    8. Teng, Wei & Mamman, Suieiman O. & Xiao, Chengyou & Abbas, Shujaat, 2024. "Impact of natural resources on income equality in Gulf Cooperation Council: Evidence from machine learning approach," Resources Policy, Elsevier, vol. 88(C).

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