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Income Polarization and Economic Growth

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  • Michal Brzezinski

Abstract

This study examines empirically the impact of income polarization on economic growth in an unbalanced panel of more than 70 countries during the 1960–2005 period. We calculate vari-ous polarization indices using existing micro-level datasets, as well as datasets reconstructed from grouped data on income distribution taken from the World Income Inequality Database. The results garnered for our preferred sample of countries suggest that income polarization has a negative impact on growth in the short term, while the impact of income inequality on growth is statistically insignificant. Our results are fairly robust to various model specifica-tions and estimation techniques.

Suggested Citation

  • Michal Brzezinski, 2013. "Income Polarization and Economic Growth," LIS Working papers 587, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:587
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    Cited by:

    1. Marta Pascual & David Cantarero & Paloma Lanza, 2018. "Health polarization and inequalities across Europe: an empirical approach," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(8), pages 1039-1051, November.
    2. Jakub Bartak, 2017. "Does income inequality hamper human capital accumulation in OECD countries?," Managerial Economics, AGH University of Science and Technology, Faculty of Management, vol. 18(2), pages 133-145.
    3. Vincenzo Prete & Alessandro Sommacal & Claudio Zoli, 2016. "Optimal Non-Welfarist Income Taxation for Inequality and Polarization Reduction," Working Papers 23/2016, University of Verona, Department of Economics.
    4. Wang, Jinxian & Caminada, Koen & Goudswaard, Kees & Wang, Chen, 2015. "Decomposing income polarization and tax-benefit changes across 31 European countries and Europe wide, 2004-2012," MPRA Paper 66155, University Library of Munich, Germany.
    5. Ilaria Petrarca & Roberto Ricciuti, 2015. "Relative income distribution in six European countries: market and disposable income," LIS Working papers 629, LIS Cross-National Data Center in Luxembourg.
    6. Sun, Yefei & Wang, Zhaohua & Yang, Tian & Zhang, Bin & Wang, Bo, 2023. "Polycentric cities and income polarization in China: Does city spatial structure matter?," Structural Change and Economic Dynamics, Elsevier, vol. 67(C), pages 380-387.
    7. Maham Zahra Mehdi & Danish Ahmed Siddiqui, 2020. "The Effect of Polarization on Economic Growth, Social Capital, and Democracy: A Cross-Country Study," Issues in Economics and Business, Macrothink Institute, vol. 6(1), pages 42-66, June.
    8. Łukasz Piętak, 2022. "Regional disparities, transmission channels and country's economic growth," Journal of Regional Science, Wiley Blackwell, vol. 62(1), pages 270-306, January.
    9. Vivek JADHAV & Dr. Shrabani MUKHERJEE, 2024. "Nexus between political federalism, social diversity and human development in India," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(638), S), pages 187-200, Spring.
    10. Danilo Šuković, 2014. "Did Economic Inequality Cause the Economic Crisis," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 61(3), pages 369-387, June.

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    More about this item

    Keywords

    economic growth; polarization; inequality; income distribution;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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