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Growth, inequality, and social welfare : cross-country evidence

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  • Dollar, David
  • Kleineberg, Tatjana
  • Kraay, Aart

Abstract

Social welfare functions that assign weights to individuals based on their income levels can be used to document the relative importance of growth and inequality changes for changes in social welfare. In a large panel of industrial and developing countries over the past 40 years, most of the cross-country and over-time variation in changes in social welfare is due to changes in average incomes. In contrast, the changes in inequality observed during this period are on average much smaller than changes in average incomes, are uncorrelated with changes in average incomes, and have contributed relatively little to changes in social welfare.

Suggested Citation

  • Dollar, David & Kleineberg, Tatjana & Kraay, Aart, 2014. "Growth, inequality, and social welfare : cross-country evidence," Policy Research Working Paper Series 6842, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6842
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    Cited by:

    1. Markus P. A. Schneider & Daniele Tavani, 2016. "A tale of two Ginis in the US, 1921–2012," International Review of Applied Economics, Taylor & Francis Journals, vol. 30(6), pages 677-692, November.
    2. Dollar, David & Kleineberg, Tatjana & Kraay, Aart, 2016. "Growth still is good for the poor," European Economic Review, Elsevier, vol. 81(C), pages 68-85.
    3. Cruz, Marcio & Ahmed, S. Amer, 2018. "On the impact of demographic change on economic growth and poverty," World Development, Elsevier, vol. 105(C), pages 95-106.
    4. Markus P.A. Schneider & Stephen Kinsella & Antoine Godin, 2015. "Redistribution in the Age of Austerity: Evidence from Europe, 2006-13," Economics Working Paper Archive wp_856, Levy Economics Institute.
    5. Tomas Hellebrandt & Paolo Mauro, 2015. "The Future of Worldwide Income Distribution," Working Paper Series WP15-7, Peterson Institute for International Economics.
    6. Xiaoyu Deng & Jing Tian & Rong Chen, 2019. "Effect of Social Security System on Consumption through Income and Uncertainty: Evidence from China," Sustainability, MDPI, Open Access Journal, vol. 11(7), pages 1-16, March.
    7. Michael Savage, 2016. "Poorest Made Poorer? Decomposing income losses at the bottom of the income distribution during the Great Recession," Papers WP528, Economic and Social Research Institute (ESRI).
    8. Yangyang Shen & Shi Li & Xiaobing Wang, 2021. "Impacts of Two Tax Reforms on Inequality and Welfare in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 29(3), pages 104-134, May.
    9. R. Radhakrishna, 2018. "Inequality in India: Trends, Emerging Challenges and Path Ways for Reduction of Inequality," Indian Journal of Human Development, , vol. 12(2), pages 121-126, August.
    10. Khalid Zaman & Sadaf Shamsuddin, 2018. "Linear and Non-linear Relationships Between Growth, Inequality, and Poverty in a Panel of Latin America and the Caribbean Countries: A New Evidence of Pro-poor Growth," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 136(2), pages 595-619, April.
    11. Vincent Leyaro, 2015. "Threshold and interaction effects in the trade, growth, and inequality relationship," WIDER Working Paper Series 009, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    Inequality; Achieving Shared Growth; Economic Conditions and Volatility; Economic Theory&Research; Equity and Development;
    All these keywords.

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