Structural Change, Economic Development, and the Labour Market

2021 ◽  
pp. 577-595
Author(s):  
Önder Nomaler ◽  
Bart Verspagen ◽  
Adriaan van Zon
Keyword(s):  
Economic Development ◽  
Structural Change ◽  
Income Inequality ◽  
Income Distribution ◽  
Technological Change ◽  
Labour Market ◽  
Skill Premium ◽  
Skilled Labour ◽  
The Relationship ◽  
Specific Country

This chapter addresses the relationship between structural change and the income distribution. It raises the question of whether structural change increases or decreases income inequality. The chapter presents a multi-sectoral model in the so-called canonical modelling tradition. In this model the distributional outcomes depend on the mix of the labour supply in different technology classes and skill biases in technological change. Whether structural change has an effect depends on the specific country. When it does have an effect, it mainly benefits high-skilled labour. The skill premium for high-skilled labour thus contributes to increased income inequality. Both the relative supply of skills and skill-based technological change tend to increase income inequality, though not in all countries.

Foreign Direct Investment as a Tool for Poverty Alleviation

2016 ◽  
pp. 127-137
Author(s):  
James Rossi ◽  
Genevieve Dupont
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Foreign Direct Investment ◽  
Income Inequality ◽  
Income Distribution ◽  
Poverty Alleviation ◽  
Direct Investment ◽  
Previous Literature ◽  
Absolute Poverty ◽  
The Relationship

It has been argued that “Absolute poverty can be alleviated if at least two conditions are met. First, economic growth must occur—or mean income must rise—on a sustained basis. Second, economic growth must be neutral with respect to income distribution or reduce income inequality.” By way of reference to current and previous literature on economic development, this chapter aims to investigate the relationship between poverty, economic growth, and income distribution, as a means of mitigating gaps in the literature on the topic, as well as contributing to the literature of Foreign Direct Investment as a tool for poverty alleviation.

Foreign Direct Investment as a Tool for Poverty Alleviation

2020 ◽  
pp. 357-368
Author(s):  
James Rossi ◽  
Genevieve Dupont
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Foreign Direct Investment ◽  
Income Inequality ◽  
Income Distribution ◽  
Poverty Alleviation ◽  
Direct Investment ◽  
Previous Literature ◽  
Absolute Poverty ◽  
The Relationship

It has been argued that “Absolute poverty can be alleviated if at least two conditions are met. First, economic growth must occur—or mean income must rise—on a sustained basis. Second, economic growth must be neutral with respect to income distribution or reduce income inequality.” By way of reference to current and previous literature on economic development, this chapter aims to investigate the relationship between poverty, economic growth, and income distribution, as a means of mitigating gaps in the literature on the topic, as well as contributing to the literature of Foreign Direct Investment as a tool for poverty alleviation.

scholarly journals Financial stability and local economic development: the experience of Italian labour market areas

2021 ◽  
Author(s):  
Cristian Barra ◽  
Roberto Zotti
Keyword(s):  
Economic Development ◽  
Labour Market ◽  
Financial Distress ◽  
Financial Stability ◽  
Local Economic Development ◽  
Banking System ◽  
Spatial Effects ◽  
Financial Conditions ◽  
Market Areas ◽  
The Relationship

AbstractRegulators should ensure the smooth functioning of the system and promote regional development. Making the health of financial institutions is therefore a prerequisite for a sustainable economic development. This paper contributes to the literature on the relationship between the financial stability and growth within the area of one country. This implies that institutional, legal, and cultural factors are more adequately controlled for and financial markets are more accurately bounded. Using a rich sample of Italian banks over the 2001–2012 period, this paper addresses whether different measures of financial distress affect economic development of labour market areas in Italy. Results show that the financial stability has a positive effect on local economic development, robust to alternative variables capturing financial vulnerability. The presence of spatial effects is tested showing that better financial conditions of the banking system in neighbouring areas have a detrimental effect on an area’s growth.

Inequality Overhang: A Heterogeneous Approach

2019 ◽  
pp. 106-133
Author(s):  
Francesco Grigoli ◽  
Adrian Robles
Keyword(s):  
Economic Development ◽  
Income Inequality ◽  
Shock Absorber ◽  
Negative Impact ◽  
Empirical Literature ◽  
Debt Overhang ◽  
Positive Side ◽  
Low Levels ◽  
The Relationship ◽  
Income Concentration

The linearity of the relationship between income inequality and economic development has been long questioned. While theory provides arguments for which the shape of the relationship may be positive for low levels of inequality and negative for high ones, most of the empirical literature assumes a linear specification finding conflicting results. Employing an innovative empirical approach, robust to endogeneity, we find pervasive evidence of nonlinearities. In particular, similar to the debt-overhang literature, we identify an inequality-overhang level, in that the slope of the relationship between income inequality and economic development switches from positive to negative at a net Gini coefficient of about 27 per cent. We also find that in an environment characterized by widespread financial inclusion and high income concentration, rising income inequality has a larger negative impact on economic development because banks may curtail credit to customers at the lower end of the income distribution. On the positive side, a sufficiently high female labor participation can act as a shock absorber reducing such a negative impact, possibly through a more efficient allocation of resources.

scholarly journals Income Inequality and Population Health: A Global Gradient?

2018 ◽  
Vol 59 (4) ◽  
pp. 536-553 ◽  
Author(s):  
Michaela Curran ◽  
Matthew C. Mahutga
Keyword(s):  
Economic Development ◽  
Income Inequality ◽  
Population Health ◽  
Fixed Effects ◽  
Harmful Effect ◽  
Fixed Effects Models ◽  
Two Measures ◽  
The Relationship ◽  
Lower Population ◽  
Cross National

Cross-national empirical research about the link between income inequality and population health produces conflicting conclusions. We address these mixed findings by examining the degree to which the income inequality and health relationship varies with economic development. We estimate fixed-effects models with different measures of income inequality and population health. Results suggest that development moderates the association between inequality and two measures of population health. Our findings produce two generalizations. First, we observe a global gradient in the relationship between income inequality and population health. Second, our results are consistent with income inequality as a proximate or conditional cause of lower population health. Income inequality has a 139.7% to 374.3% more harmful effect on health in poorer than richer countries and a significantly harmful effect in 2.1% to 53.3% of countries in our sample and 6.6% to 67.6% of the world’s population but no significantly harmful effect in richer countries.

scholarly journals Economic Growth and Income Inequality in Developing Countries

2015 ◽  
Vol 9 (6) ◽  
pp. 79-82 ◽  
Author(s):  
Morteza Nemati ◽  
Ghasem Raisi
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Income Inequality ◽  
Income Distribution ◽  
Economic System ◽  
Development Strategy ◽  
Low Income ◽  
Poverty Eradication ◽  
The Relationship ◽  
Selection Of

Nowadays, improvement in income distribution and poverty eradication and hence low inequality are served as the main objectives of economic and social development strategy even prior than primary tasks of governments. to manifest importance of income distribution, some economists adopt income inequality and income distribution in society as criteria for economic system of the community, although these criteria and measures are theoretical for the economic system and this varies from the perspective of different people, however, it denotes on  importance of income distribution among individuals. The main objective of this study was to evaluate the effect of economic growth on income inequality in the selection of low-income developing countries.To this end, using panel data and data for 28 developing countries over the period 1990-2010 the relationship between GDP and the Gini coefficient was examined. The results indicate that as per hypothesis Kuznets in the early stages of growth, income inequality increases and then it declines in later stage.

scholarly journals China

2021 ◽  
pp. 133-156
Author(s):  
Shi Li ◽  
Terry Sicular ◽  
Finn Tarp
Keyword(s):  
Structural Change ◽  
Income Inequality ◽  
Income Distribution ◽  
Economic Transition ◽  
Rent Seeking ◽  
Market Development ◽  
Welfare Policies ◽  
The Third ◽  
The Past ◽  
Labour Absorption

This chapter describes the major trends in China’s income inequality over the past forty years and explains them as the outcome of four interleaved stories. The first story is a standard development story characterized by structural change, market development, labour absorption, and the Kuznets inverted-U path of inequality. The second is the economic transition story, in which changes in income distribution result from the shift from plan to market. The third is incomplete transition, with opportunities for rent-seeking, corruption, and hidden income. The fourth is the story of government efforts to moderate inequality through social and welfare policies.

Minimum wages and inequality in Mexico

2020 ◽  
pp. 573-595
Author(s):  
Alice Krozer ◽  
Stefanie Garry ◽  
Juan Carlos Moreno-Brid
Keyword(s):  
Economic Development ◽  
Income Inequality ◽  
Minimum Wage ◽  
Latin American ◽  
Poverty Reduction ◽  
Minimum Wages ◽  
The Other ◽  
Comparative Perspective ◽  
The Status ◽  
The Relationship

The literature on minimum wages in Mexico has focused largely on their impact on poverty, and poverty reduction, while their relationship with inequality has not been fully explored. The purpose of this chapter is to examine the status and dynamics of the minimum wage in Mexico and its relation with income inequality from a Latin American comparative perspective. In this context, we are mostly interested in juxtaposing the Mexican experience with the cases of Brazil, Argentina, and Chile, as three countries of roughly comparable economic development in the region pursuing labour policies diametrically opposing those of Mexico. In light of this Mexican exceptionality, we analyse the relationship between minimum wages and inequality in the country, and what Mexico could learn from the diverging experience of the other countries, with the aim of providing some recommendations to policymakers.

Structural Change as a Modernization Process

2021 ◽  
pp. 217-239
Author(s):  
Alejandro Lavopa ◽  
Adam Szirmai
Keyword(s):  
Economic Development ◽  
Structural Change ◽  
Labour Force ◽  
Two Dimensions ◽  
Middle Income ◽  
Employment Share ◽  
Catch Up ◽  
Modernization Process ◽  
Relative Productivity ◽  
The Relationship

This chapter analyses economic development through the lens of a newly developed index: the structural modernization index. This index combines two dimensions that have been widely invoked as prime drivers of economic development namely, structural change and technological catch-up. For each country, the index calculates the productivity gap with respect to the world frontier in activities that typically represent the modern sector of the economy and weights this relative productivity by the employment share of those activities in the total labour force. The index is calculated for a sample of 115 countries over the period 1960–2014. It is used to explore the relationship between structural modernization and the ability to escape poverty and middle-income traps.

Income Inequality and Economic Development

2010 ◽  
Author(s):  
Matthew McKeever
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Income Inequality ◽  
Poverty Reduction ◽  
Industrial Society ◽  
Considerable Debate ◽  
The Subject ◽  
The Rich ◽  
The Government ◽  
The Relationship

The nature of the relationship between economic development and income inequality has long been the subject of considerable debate. Economic growth has very different effects on poverty, depending on a country’s level of income inequality. In high inequality countries, economic growth that raises the overall level of income disproportionately tends to benefit the rich, whereas policies that encourage economic growth while reducing income inequality will greatly accelerate the achievement of poverty reduction goals. Thus, understanding how income inequality and economic development are linked is important for establishing economic growth policies that reduce poverty. The literature on the economic development–income inequality nexus in industrial society places emphasis on the causes of current social inequality. The central and most cited paper in the literature is S. Kuznets’s “Economic Growth and Income Inequality” (1955), which proposed an inverted U-shaped relationship between development and inequality over the course of industrialization. Some scholars have tried to build upon Kuznets’s theory by focusing on his claim that income inequality is a function of the nature of regulations put on the market. Other studies deal with the importance of studying the relationship between democracy and inequality, the effect of the nature of the government on shaping inequality compared to industrialization, and the implications of globalization for income inequality. This overview of the literature shows that there is little true consensus on the relationship between inequality and development and highlights two major areas for improvement: measurement and data quality.

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