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Does Growth Affect the Nature of Inequality? Ireland 1994-2001

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  • Aedin Doris

    (Economics, National University of Ireland, Maynooth)

  • Donal O’Neill

    (Economics, National University of Ireland, Maynooth)

  • Olive Sweetman

    (Economics, National University of Ireland, Maynooth)

Abstract

Much has been written about the relationship between economic growth and aggregate inequality in recent years. In this paper we extend this literature by examining whether economic growth affects, not the level, but rather the nature of inequality. To do this we focus on the Irish economy which experienced a remarkable boom starting in 1994. We analyse the covariance structure of earnings in Ireland to examine whether this rapid growth affected earnings dynamics over the period. Using panel data for the years 1994-2001, we show that, while permanent inequality in Ireland is high, the degree of persistence of inequality was not significantly affected by the rapid growth in the economy.

Suggested Citation

  • Aedin Doris & Donal O’Neill & Olive Sweetman, 2008. "Does Growth Affect the Nature of Inequality? Ireland 1994-2001," Economics Department Working Paper Series n1930708.pdf, Department of Economics, National University of Ireland - Maynooth.
    • Handle: RePEc:may:mayecw:n1930708.pdf
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    Cited by:

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    2. Aedín Doris & Donal O’Neill & Olive Sweetman, 2013. "Identification of the covariance structure of earnings using the GMM estimator," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(3), pages 343-372, September.

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    More about this item

    Keywords

    Permanent Inequality; Transitory Inequality;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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