Spatial inequality and development: Is there an inverted-U relationship?

Arbeitspapier

This paper studies the hypothesis of an inverted-U-shaped relationship between spatial inequality and economic development. The theory of Kuznets (1955) and Williamson (1965) suggests that (spatial) inequality first increases in the process of development, then peaks, and then decreases. To test this hypothesis I have used a unique panel data set of spatial inequalities in 55 countries at different stages of economic development, covering the period 1980-2009. Parametric and semiparametric regressions are carried out using cross-section and (unbalanced) panel data. The results provide strong support for the existence of an inverted U, but importantly I also find spatial inequalities to increase again at very high levels of economic development. Although many factors may be contributing to this rise, one explanation rests on the process of tertiarization, i.e., the structural shift from industrial production towards a service base in the highest-developed economies.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 3622

Classification and Topics

• Classification: Wirtschaft ; Personal Income, Wealth, and Their Distributions ; General Regional Economics (includes Regional Data) ; Economic Development: Human Resources; Human Development; Income Distribution; Migration
• Subject: regional inequality ; Kuznets curve ; panel data ; semiparametric estimates

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lessmann, Christian
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/52441
• Last update: 10.03.2025, 11:45 AM CET