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Natural Resources and Income Inequality in Developed Countries: Synthetic Control Method Evidence

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  • Christopher Hartwell

    (Bournemouth University)

  • Roman Horvath
  • Eva Horvathova
  • Olga Popova

Abstract

We examine the causal effect of natural resource discoveries on income inequality using the synthetic control method on data from 1947 to 2009. We focus on the natural discoveries in Denmark, Netherlands and Norway in the 1960–1970s and use top 1% and top 10% income share as the measure of income inequality. Many previous studies have been concerned that natural resources may increase income inequality. To the contrary, our results suggest that natural resources decrease income inequality or have no effect. We attribute this effect to the high institutional quality of countries we examine.

Suggested Citation

  • Christopher Hartwell & Roman Horvath & Eva Horvathova & Olga Popova, 2019. "Natural Resources and Income Inequality in Developed Countries: Synthetic Control Method Evidence," Working Papers 381, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
  • Handle: RePEc:ost:wpaper:381
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    Cited by:

    1. Alexeev, Michael & Zakharov, Nikita, 2022. "Who profits from windfalls in oil tax revenue? Inequality, protests, and the role of corruption," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 472-492.
    2. Christopher A. Hartwell & Roman Horvath & Eva Horvathova & Olga Popova, 2019. "Democratic Institutions, Natural Resources, and Income Inequality," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(4), pages 531-550, December.
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    More about this item

    Keywords

    Natural resources; income inequality; synthetic control method;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)

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