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Assessment of Relationship between Growth and Inequality: Micro Evidence from Thailand

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  • Hyeok Jeong

Abstract

This paper shows that growth and income distribution dynamics are closely linked through occupation, financial intermediation, and education. We use the micro data from Thailand for 1976-1996. The compositional changes across these characteristics account for half of the Thai inequality increase and forty percent of the Thai growth and poverty reduction. Financial deepening and educational expansion contributed to increasing inequality while occupational transformation contributed to poverty alleviation. The changes in income gaps across the income-status groups, that is, divergence and then convergence, give rise to inverted- U inequality dynamics. These two growth-related components of inequality dynamics, composition and income-gap dynamics, explain virtually all the change in overall inequality, except its initial rise. Thus, inequality dynamics can be viewed as integral part of wider process of growth as Kuznets speculated.

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  • Hyeok Jeong, 2005. "Assessment of Relationship between Growth and Inequality: Micro Evidence from Thailand," IEPR Working Papers 05.20, Institute of Economic Policy Research (IEPR).
    • Handle: RePEc:scp:wpaper:05-20
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    Cited by:

    1. Hyeok Jeong & Robert Townsend, 2007. "Sources of TFP growth: occupational choice and financial deepening," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 32(1), pages 179-221, July.
    2. Christian Ahlin & Hyeok Jeong, 2021. "A conditional Gini: measure, estimation, and application," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(2), pages 363-384, June.
    3. Mathan Satchi & Jonathan Temple, 2006. "Growth and labour markets in developing countries," Bristol Economics Discussion Papers 06/581, School of Economics, University of Bristol, UK.
    4. Paweenawat, Sasiwimon Warunsiri & McNown, Robert, 2014. "The determinants of income inequality in Thailand: A synthetic cohort analysis," Journal of Asian Economics, Elsevier, vol. 31, pages 10-21.
    5. Somchai Jitsuchon, 2014. "Income Inequality, Poverty And Labor Migration In Thailand," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 59(01), pages 1-16.
    6. Asli Demirgüç-Kunt & Ross Levine, 2009. "Finance and Inequality: Theory and Evidence," Annual Review of Financial Economics, Annual Reviews, vol. 1(1), pages 287-318, November.
    7. Veerayooth Kanchoochat, 2023. "Siamese Twin Troubles: Structural and Regulatory Transformations in Unequal Thailand," Asian Economic Policy Review, Japan Center for Economic Research, vol. 18(1), pages 47-68, January.
    8. Pawasutipaisit, Anan & Townsend, Robert M., 2011. "Wealth accumulation and factors accounting for success," Journal of Econometrics, Elsevier, vol. 161(1), pages 56-81, March.
    9. Natalia Vashchelyuk, 2015. "The Impact of Output Dynamics on Income Inequality in the Russian Regions," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(4), pages 132-144.
    10. Nakavachara, Voraprapa, 2010. "Superior female education: Explaining the gender earnings gap trend in Thailand," Journal of Asian Economics, Elsevier, vol. 21(2), pages 198-218, April.
    11. Bozhechkova, Alexandra Viktorovna & Vashelyuk, Natalia. & Nazarov, P.A. & Perevyshin, Yuri & Tumanova, Elena Alexandrovna & Shagas, Natalia, 2015. "Modeling the Effects of Economic Policy and Changes in the Behavior of Economic Agents," Published Papers 2311, Russian Presidential Academy of National Economy and Public Administration.
    12. Anne Goujon & Samir K.C., 2009. "Past and Future of Human Capital in Southeast Asia: From 1970 to 2030," VID Working Papers 0607, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna.
    13. Nada Wasi & Sasiwimon Warunsiri Paweenawat & Chinnawat Devahastin Na Ayudhya & Pucktada Treeratpituk & Chommanart Nittayo, 2019. "Labor Income Inequality in Thailand: the Roles of Education, Occupation and Employment History," PIER Discussion Papers 117, Puey Ungphakorn Institute for Economic Research.

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    More about this item

    Keywords

    Kuznets Dynamics; Growth; Inequality; Poverty;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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