Arbeitspapier

Income inequality, economic growth, and the effect of redistribution

Evidence from a current panel of harmonized worldwide data highlights a robust negative effect of income inequality on economic growth that we trace back to its transmission channels. Less equal societies tend to have less educated populations and higher fertility rates, but not necessarily lower investment shares. The first two effects are harmful for growth and reinforced by limited credit availability. Higher public spending on education attenuates the negative effects of inequality. In addition to the inequality-growth relationship, we examine the direct influence of effective redistribution. When net inequality is held constant, public redistribution negatively affects economic growth. Redistribution hampers investment and raises fertility rates. Combining the negative direct growth effect and the indirect positive effect operating through lower net inequality, the overall impact of redistribution is insignificant. Whereas this result stems mainly from advanced economies, redistribution is beneficial for growth in low and middle-income countries.

Sprache
Englisch

Erschienen in
Series: W.E.P. - Würzburg Economic Papers ; No. 95

Klassifikation
Wirtschaft
Macroeconomic Analyses of Economic Development
Economic Development: Human Resources; Human Development; Income Distribution; Migration
Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Thema
Economic Growth
Redistribution
Inequality
Panel Data

Ereignis
Geistige Schöpfung
(wer)
Gründler, Klaus
Scheuermeyer, Philipp
Ereignis
Veröffentlichung
(wer)
University of Würzburg, Department of Economics
(wo)
Würzburg
(wann)
2015

Handle
Letzte Aktualisierung
10.03.2025, 11:45 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Gründler, Klaus
  • Scheuermeyer, Philipp
  • University of Würzburg, Department of Economics

Entstanden

  • 2015

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