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Reversal of the Kuznets curve: Study on the inequality–development relation using top income shares data

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  • Tuominen Elina

    (School of Management, University of Tampere)

Abstract

In this study, recently published top 1% income share series are exploited in studying the inequality–development association in 26 countries from 1900 to 2010. The top income shares data are of high quality and provide interesting possibilities for studying slow development processes. Because many empirical inequality– development studies have challenged the use of quadratic specifications, this study addresses the issue of functional form by applying penalized spline methods. The relationship between the top 1% income share and development is found to experience a reversal at the highest levels of development and, thus, a positive association is now observed in many “advanced” economies. In an additional analysis covering a shorter time period, the discovered positive relationship holds at the highest levels of development when controls for two sectoral measures are included.

Suggested Citation

  • Tuominen Elina, 2016. "Reversal of the Kuznets curve: Study on the inequality–development relation using top income shares data," Working Papers 1610, Tampere University, Faculty of Management and Business, Economics.
    • Handle: RePEc:tam:wpaper:1610
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    File URL: http://urn.fi/URN:ISBN:978-952-03-0252-8
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    References listed on IDEAS

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    More about this item

    Keywords

    inequality; top incomes; development; nonlinearity; longitudinal data;
    All these keywords.

    JEL classification:

    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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