Flattening the Kuznets Curve
Empirical study, using regression analysis of the combined cross-section and time series data for 83 countries. The following hypotheses are tested: (1) The Kuznets Curve does not exist. That is, the level of per capita income has no effect on income distribution, once other relevant factors are taken into account. (2) Even if the Kuznets Curve exists, the relationship between per capita income and income distribution is not stable over time. (3) Differences in socio-political systems are much more important than per capita income in explaining cross-country variations in income distribution. It will be more egalitarian in countries that are Communist, or suffer extensive government intervention in the economy, or have no dualistic socio-political structure. (4) Spread of education leads to greater income equality. (5) Rate of growth does not affect income distribution. (6) Structure of the economy, especially the relative importance of primary and manufactured exports, is a major factor in income distribution. (7) There are no systematic differences in income distribution among the major regions of the world, once such explanatory variables as socio-political systems or education are included in the analysis.
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