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Inequality is bad for growth of the poor (but not for that of the rich)

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  • Milanovic,Branko L.
  • Van Der Weide,Roy
  • Milanovic,Branko L.
  • Van Der Weide,Roy

Abstract

The paper assesses the impact of overall inequality, as well as inequality among the poor and among the rich, on the growth rates along various percentiles of the income distribution. The analysis uses micro-census data from U.S. states covering the period from 1960 to 2010. The paper finds evidence that high levels of inequality reduce the income growth of the poor and, if anything, help the growth of the rich. When inequality is deconstructed into bottom and top inequality, the analysis finds that it is mostly top inequality that is holding back growth at the bottom.

Suggested Citation

  • Milanovic,Branko L. & Van Der Weide,Roy & Milanovic,Branko L. & Van Der Weide,Roy, 2014. "Inequality is bad for growth of the poor (but not for that of the rich)," Policy Research Working Paper Series 6963, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6963
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    File URL: http://documents.worldbank.org/curated/en/888731468331207447/pdf/WPS6963.pdf
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    References listed on IDEAS

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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Les inégalités sont bonnes pour la croissance des riches… pas pour celle des pauvres
      by ? in D'un champ l'autre on 2014-07-06 04:59:00
    2. <a href="/article/good-rich-bad-poor">Good for the rich, bad for the poor</a>
      by ? in VoxEU.org on 2014-11-30 04:46:17
    3. Inequality Grows The Incomes Of The Rich But Not The Incomes Of The Poor
      by Tim Worstall in Tim Worstall (Forbes) on 2014-11-30 17:31:00
    4. Inequality Is Bad For Income Growth Of the Poor (But Not For That of the Rich)
      by ? in Naked Capitalism on 2014-12-01 11:55:00
    5. Does inequality today hurt future growth of the poor?
      by Branko Milanovic in globalinequality on 2014-12-04 03:22:00

    Citations

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    Cited by:

    1. Milanovic, Branko, 2016. "Why might the rich be indifferent to income growth of their own countries?," Economics Letters, Elsevier, vol. 147(C), pages 108-111.
    2. repec:eee:ecolec:v:144:y:2018:i:c:p:228-243 is not listed on IDEAS
    3. Raymundo M. Campos Vázquez & Luis A. Monroy-Gómez-Franco, 2016. "La relación entre crecimiento económico y pobreza en México," Serie documentos de trabajo del Centro de Estudios Económicos 2016-01, El Colegio de México, Centro de Estudios Económicos.

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    Keywords

    Educational Sciences; Inequality; Poverty Reduction Strategies; Labor Markets;

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