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The effect of foreign aid on income inequality: Evidence from panel cointegration

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  • Herzer, Dierk
  • Nunnenkamp, Peter

Abstract

This paper examines the long-run effect of foreign aid on income inequality for 21 recipient countries using panel cointegration techniques to control for omitted variable and endogeneity bias. We find that aid exerts an inequality increasing effect on income distribution.

Suggested Citation

  • Herzer, Dierk & Nunnenkamp, Peter, 2012. "The effect of foreign aid on income inequality: Evidence from panel cointegration," Kiel Working Papers 1762, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1762
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    More about this item

    Keywords

    inequality; foreign aid; panel data; cointegration;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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