IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Inequality, growth and welfare: The main links

  • Joël Hellier

    ()

    (EQUIPPE, Univ. of Lille 1 and LEMNA, Univ. of Nantes)

  • Stéphane Lambrecht

    (EQUIPPE, Univ. of Lille 1 and Univ. of Valenciennes)

We review the literature on the links between inequality, growth and welfare. Three questions are addressed: 1) What is the impact of growth and development on inequality? 2) What is the impact of inequality on growth, development and welfare? 3) What is the impact of proequality public policies upon growth and welfare? As regards the first question, the theoretical and empirical literature that analyses Kuznets hypothesis is firstly reviewed. The answer to the question of the impact of inequality on growth is twofold. Firstly, inequality fosters growth when this is based on capital accumulation, but it hinders growth when growth is based on human capital accumulation and when inequality-related social disturbances are considered. Identically, pro-equality public policies may engender very different effects upon growth depending on their influence on factor accumulation. These mixed impacts may explain the ambiguous findings provided by the empirical literature. If most of the estimates carried out in the 1990s seemed to confirm that inequality was damaging for growth, the 2000s empirical literature reconsiders this diagnosis but remains inconclusive.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.ecineq.org/milano/WP/ECINEQ2012-258.pdf
Download Restriction: no

Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 258.

as
in new window

Length: 36 pages
Date of creation: Jun 2012
Date of revision:
Handle: RePEc:inq:inqwps:ecineq2012-258
Contact details of provider: Web page: http://www.ecineq.org
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Caselli, F. & Ventura, J., 1996. "A Representative Consumer Theory of Distribution," Working papers 96-11, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Greenwood, J. & Jovanovic, B., 1990. "Financial Development, Growth, And The Distribution Of Income," University of Western Ontario, The Centre for the Study of International Economic Relations Working Papers 9002, University of Western Ontario, The Centre for the Study of International Economic Relations.
  3. BORISSOV, Kirill & LAMBRECHT, Stéphane, 2007. "Growth and distribution in an AK-model with endogenous impatience," CORE Discussion Papers 2007044, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  4. Ram, Rati, 1995. "Economic Development and Income Inequality: An Overlooked Regression Constraint," Economic Development and Cultural Change, University of Chicago Press, vol. 43(2), pages 425-34, January.
  5. Ales Bulir, 1998. "Income Inequality: Does Inflation Matter?," IMF Working Papers 98/7, International Monetary Fund.
  6. repec:oup:restud:v:60:y:1993:i:1:p:35-52 is not listed on IDEAS
  7. Mausumi Das, 2002. "Persistent Inequality: An Explanation Based on Limited Parental Altruism," Working papers 101, Centre for Development Economics, Delhi School of Economics.
  8. Durlauf, Steven N., 1994. "Spillovers, stratification, and inequality," European Economic Review, Elsevier, vol. 38(3-4), pages 836-845, April.
  9. Frazer, Garth, 2006. "Inequality and development across and within countries," World Development, Elsevier, vol. 34(9), pages 1459-1481, September.
  10. Barham, Vicky & Boadway, Robin & Marchand, Maurice & Pestieau, Pierre, 1995. "Education and the poverty trap," European Economic Review, Elsevier, vol. 39(7), pages 1257-1275, August.
  11. Maoz, Yishay D & Moav, Omer, 1999. "Intergenerational Mobility and the Process of Development," Economic Journal, Royal Economic Society, vol. 109(458), pages 677-97, October.
  12. Roland Benabou, 1991. "Workings of a City: Location, Education, and Production," NBER Technical Working Papers 0113, National Bureau of Economic Research, Inc.
  13. Lucas, Robert Jr. & Stokey, Nancy L., 1984. "Optimal growth with many consumers," Journal of Economic Theory, Elsevier, vol. 32(1), pages 139-171, February.
  14. Scarth, William, 2000. "Growth and Inequality: A Review Article," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(3), pages 389-97, September.
  15. Robinson, Sherman, 1976. "A Note on the U Hypothesis Relating Income Inequality and Economic Development," American Economic Review, American Economic Association, vol. 66(3), pages 437-40, June.
  16. Saint-Paul, Gilles & Verdier, Thierry, 1993. "Education, democracy and growth," Journal of Development Economics, Elsevier, vol. 42(2), pages 399-407, December.
  17. Mark Gradstein & Moshe Justman & Volker Meier, 2004. "The Political Economy of Education: Implications for Growth and Inequality," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262072564, June.
  18. Dinda, Soumyananda, 2006. "Social Capital in the creation of Human Capital and Economic Growth: A Productive Consumption Approach," MPRA Paper 50586, University Library of Munich, Germany, revised 28 May 2007.
  19. repec:oup:restud:v:60:y:1993:i:4:p:755-76 is not listed on IDEAS
  20. Amparo Castello & Rafael Domenech, 2002. "Human Capital Inequality and Economic Growth: Some New Evidence," Economic Journal, Royal Economic Society, vol. 112(478), pages C187-C200, March.
  21. Marcel Fafchamps & Steven N. Durlauf, 2004. "Social Capital," Economics Series Working Papers WPS/2004-14, University of Oxford, Department of Economics.
    • Durlauf, Steven N. & Fafchamps, Marcel, 2005. "Social Capital," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 26, pages 1639-1699 Elsevier.
  22. Antoci, Angelo & Sabatini, Fabio & Sodini, Mauro, 2010. "The Solaria Syndrome: Social Capital in a Growing Hyper-technological Economy," MPRA Paper 21023, University Library of Munich, Germany.
  23. Nathalie Chusseau & Joël Hellier, 2011. "Educational Systems, Intergenerational Mobility and Social Segmentation," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 8(2), pages 203-233, December.
  24. Bertola, Giuseppe, 1991. "Factor Shares and Savings In Endogenous Growth," CEPR Discussion Papers 576, C.E.P.R. Discussion Papers.
  25. Huang, Ho-Chuan River, 2004. "A flexible nonlinear inference to the Kuznets hypothesis," Economics Letters, Elsevier, vol. 84(2), pages 289-296, August.
  26. Nathalie Chusseau & Joël Hellier, 2007. "Impacts de l'ouverture Nord-Sud sur le progrès technique et les inégalités salariales," Revue économique, Presses de Sciences-Po, vol. 58(2), pages 455-479.
  27. James E. Rauch, 1991. "Economic Development, Urban Underemployment, and Income Inequality," NBER Working Papers 3758, National Bureau of Economic Research, Inc.
  28. Xavier Sala-i-Martin, 1995. "Transfers, social safety nets and economic growth," Economics Working Papers 139, Department of Economics and Business, Universitat Pompeu Fabra.
  29. Anand, Sudhir & Kanbur, S. M. R., 1993. "Inequality and development A critique," Journal of Development Economics, Elsevier, vol. 41(1), pages 19-43, June.
  30. Clarke, George R. G., 1995. "More evidence on income distribution and growth," Journal of Development Economics, Elsevier, vol. 47(2), pages 403-427, August.
  31. Galor, Oded & Tsiddon, Daniel, 1997. " The Distribution of Human Capital and Economic Growth," Journal of Economic Growth, Springer, vol. 2(1), pages 93-124, March.
  32. Galor, Oded & Moav, Omer, 1999. "From Physical to Human Capital Accumulation: Inequality in the Process of Development," CEPR Discussion Papers 2307, C.E.P.R. Discussion Papers.
  33. Zhou, X. & Li, Kui-Wai, 2011. "Inequality and development: Evidence from semiparametric estimation with panel data," MPRA Paper 36418, University Library of Munich, Germany.
  34. Steven N. Durlauf, 1992. "A Theory of Persistent Income Inequality," NBER Working Papers 4056, National Bureau of Economic Research, Inc.
  35. Garcia-Penalosa, Cecilia & Aghion, Philippe & Caroli, Eve, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Economics Papers from University Paris Dauphine 123456789/10091, Paris Dauphine University.
  36. Laitner, John, 1992. "Random earnings differences, lifetime liquidity constraints, and altruistic intergenerational transfers," Journal of Economic Theory, Elsevier, vol. 58(2), pages 135-170, December.
  37. Barro, Robert J, 2000. " Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
  38. Gary S. Becker & Nigel Tomes, . "Human Capital and the Rise and Fall of Families," University of Chicago - Population Research Center 84-10, Chicago - Population Research Center.
  39. Grossman, Herschel I, 1994. "Production, Appropriation, and Land Reform," American Economic Review, American Economic Association, vol. 84(3), pages 705-12, June.
  40. Chatterjee, Satyajit, 1994. "Transitional dynamics and the distribution of wealth in a neoclassical growth model," Journal of Public Economics, Elsevier, vol. 54(1), pages 97-119, May.
  41. Eusufzai, Zaki, 1997. "The Kuznets hypothesis: An indirect test," Economics Letters, Elsevier, vol. 54(1), pages 81-85, January.
  42. Anand, Sudhir & Kanbur, S. M. R., 1993. "The Kuznets process and the inequality--development relationship," Journal of Development Economics, Elsevier, vol. 40(1), pages 25-52, February.
  43. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
  44. Campano, Fred & Salvatore, Dominick, 1988. "Economic development, income inequality and Kuznets' U-shaped hypothesis," Journal of Policy Modeling, Elsevier, vol. 10(2), pages 265-280.
  45. repec:oup:restud:v:58:y:1991:i:2:p:211-35 is not listed on IDEAS
  46. Grossman, Herschel I, 1991. "A General Equilibrium Model of Insurrections," American Economic Review, American Economic Association, vol. 81(4), pages 912-21, September.
  47. Perotti, Roberto, 1996. " Growth, Income Distribution, and Democracy: What the Data Say," Journal of Economic Growth, Springer, vol. 1(2), pages 149-87, June.
  48. Banerjee, Abhijit V & Newman, Andrew F, 1993. "Occupational Choice and the Process of Development," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 274-98, April.
  49. Abhijit V. Banerjee & Esther Duflo, 2000. "Inequality and Growth: What Can the Data Say?," NBER Working Papers 7793, National Bureau of Economic Research, Inc.
  50. Alberto Alesina & Roberto Perotti, 1993. "Income Distribution, Political Instability, and Investment," NBER Working Papers 4486, National Bureau of Economic Research, Inc.
  51. Roed,K. & Strom,S., 1999. "Progressive taxes and the labour market : is the trade-off between equality and efficiency inevitable?," Memorandum 19/1999, Oslo University, Department of Economics.
  52. Bourguignon, F. & Morrisson, C., 1990. "Income distribution, development and foreign trade : A cross-sectional analysis," European Economic Review, Elsevier, vol. 34(6), pages 1113-1132, September.
  53. Nathalie Chusseau & Joël Hellier & Bassem Ben-Halima, 2012. "Education, Intergenerational Mobility and Inequality," Working Papers hal-00993472, HAL.
  54. Galor, Oded & Tsiddon, Daniel, 1996. "Income Distribution and Growth: The Kuznets Hypothesis Revisited," Economica, London School of Economics and Political Science, vol. 63(250), pages S103-17, Suppl..
  55. Perotti, Roberto & Alesina, Alberto, 1996. "Income Distribution, Political Instability, and Investment," Scholarly Articles 4553018, Harvard University Department of Economics.
  56. Glomm, Gerhard & Ravikumar, B., 1998. "Increasing returns, human capital, and the Kuznets curve," Journal of Development Economics, Elsevier, vol. 55(2), pages 353-367, April.
  57. Gerhard Glomm & Michael Kaganovich, 2003. "Distributional Effects of Public Education in an Economy with Public Pensions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(3), pages 917-937, 08.
  58. Glomm, Gerhard & Kaganovich, Michael, 2008. "Social security, public education and the growth-inequality relationship," European Economic Review, Elsevier, vol. 52(6), pages 1009-1034, August.
  59. Graziella Bertocchi and Michael Spagat, 2001. "The Evolution of Modern Educational Systems," Royal Holloway, University of London: Discussion Papers in Economics 01/4, Department of Economics, Royal Holloway University of London, revised Sep 2001.
  60. Ahluwalia, Montek S., 1976. "Inequality, poverty and development," Journal of Development Economics, Elsevier, vol. 3(4), pages 307-342, December.
  61. Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September.
  62. Nathalie Chusseau & Joël Hellier, 2008. "Social policies and R&D subsidies: Impact on inequality, unemployment, growth and the tax burden," International Journal of Manpower, Emerald Group Publishing, vol. 29(3), pages 239-262, July.
  63. Mollick, André Varella, 2012. "Income inequality in the U.S.: The Kuznets hypothesis revisited," Economic Systems, Elsevier, vol. 36(1), pages 127-144.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:inq:inqwps:ecineq2012-258. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maria Ana Lugo)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.