scholarly journals An Empirical Examination of the Impact of Economic Structural Change on Income Inequality: Dynamic Heterogeneous Panel Approach

2021 ◽  
Vol 10 (1) ◽  
pp. 136
Author(s):  
Maha Elhini ◽  
Rasha Hammam
Keyword(s):  
Structural Change ◽  
Income Inequality ◽  
Value Added ◽  
Least Squares Regression ◽  
Economic Sectors ◽  
Empirical Examination ◽  
Middle Income ◽  
Middle Income Countries ◽  
Long Run ◽  
The Impact

This paper employs structural growth perspective to the analysis of income inequality in 43 countries over the period 2003-2017.The study utilizes two different panel estimation techniques. First, the panel least squares regression examines the relevance of Kuznets effect of the different economic sectors; agriculture, manufacturing and services on income inequality. Second, the pooled mean group (PMG) estimation of dynamic heterogeneous panels gauges the long run impact of the change in sectoral value added as a proxy for structural change on inequality. PMG presents short run adjustments to be country-specific due to the widely different impacts of macroeconomic conditions and vulnerability of each country to income inequality. Empirical findings show that across all countries, sector growth had no to negligible impact on inequality indicating that no signs are evident of Kuznets effect. However, both inflation and unemployment have mixed impacts on inequality in Lower and Middle-Income countries. Results further reveal that unemployment has a relatively stronger influence on inequality than inflation for Upper-middle income countries, unlike in Lower-middle income countries, where unemployment shows a weaker correlation with inequality than inflation. Results for High-income countries show that the influence between inflation and unemployment are not as big as in Upper middle-income countries.

scholarly journals Eradicating Income Inequality in Lower Middle-Income Countries

2020 ◽  
Vol 20 (2) ◽  
pp. 222-231
Author(s):  
Tangguh Pratysto ◽  
Ingrid Panjaitan
Keyword(s):  
Human Capital ◽  
Income Inequality ◽  
Income Distribution ◽  
Physical Capital ◽  
School Enrollment ◽  
Middle Income ◽  
Middle Income Countries ◽  
Long Run ◽  
The Rich ◽  
The Impact

Studying the distribution of income is an important issue to know what factors which affect to make income distribution more equitable, what factors can be the key to resolving the problem of income inequality, and shortening the distance between the poor and the rich. This paper studies the relationship between human capital, inflation rate, unemployment rate, physical capital, fiscal expenditure, gross domestic product growth, and urbanization on income inequality in 52 Lower Middle-Income Countries throughout 1990-2014. The authors estimate the impact of seven independent variables on income inequality as a dependent using Prais-Winsten with the robust model over period 1990-2014 at 52 Lower Middle-Income Countries. The results indicate an increase in human capital (gross school enrollment tertiary) can make the income distribution more even in the long run. The writers conclude that increases in human capital can reduce Gini coefficient and hence make income distribution fairer.

scholarly journals Innovations in achieving sustainable economic performance under income inequality

2021 ◽  
Vol 5 (2) ◽  
pp. 146-154
Author(s):  
Inna Cabelkova ◽  
Manuela Tvaronaviciene ◽  
Wadim Strielkowski
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Income Inequality ◽  
Economic Performance ◽  
Financial Services ◽  
Developing Economies ◽  
Well Being ◽  
Middle Income ◽  
Middle Income Countries ◽  
The Impact

The negative effect of income inequality on economic growth represents a topic that constitutes a broad topic of research in the standard economic theory. One of the immediate consequences of income inequality is diminished consumption. Many «poor» customers cannot provide sufficient demand for the producers, causing overproduction that might lead to an economic crisis. It constitutes a problem because sustainable economic performance needs to be achieved under the conditions of income inequality. Reducing social and economic inequality in countries is an essential step towards ensuring that no one is left behind. It is also part of the 10th Sustainable Development Goal aimed to reduce it by 2030. Inequality is based on the income distribution between the top 1% and the bottom 99% of households in any given country. The degree of inequality could play a beneficial role if it is driven by market forces and is associated with incentives to increase growth. In developing and emerging countries, greater equality and improvements in living standards are needed to enable populations to flourish. Inequality reduction is one of the most critical steps a government could take to improve the well-being of its population. The income inequality growth increases human capital in poor countries and reduces it in high and middle-income countries. In poorer countries, it increases them, but in higher – and middle-income countries, it reduces them. Income inequality could be reduced by improving human capital and general skill levels, correcting labor-market policies, and making better use of financial services. In turn, sustainable economic growth could reverse the negative effects of inequality, reducing the need for high-wage and higher-earning households. Thus, it provides higher economic growth. This paper discusses three ways to circumvent the impact of decreasing consumption on economic growth adopted in developing economies over the last fifty years, such as increasing exports, providing loans for consumption, and printing new money. The findings showed that none of these methods seem to be sustainable in the long run. Thus novel and innovative mechanisms that would allow our economy to reduce inequality are necessary and need to be put into place.

Linkages between Financial Development and Economic Growth in the Middle-Income Countries of South Asia: A Panel Data Investigation

2020 ◽  
Vol 24 (2) ◽  
pp. 140-150 ◽  
Author(s):  
Rajesh Sharma ◽  
Pradeep Kautish
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
South Asia ◽  
Banking Sector ◽  
Sustainable Growth ◽  
Gdp Growth ◽  
Middle Income ◽  
Middle Income Countries ◽  
Long Run ◽  
The Impact

The present study intends to investigate the impact of financial sector development on GDP growth in the four middle-income countries of South Asia over the period of 1990–2016. Using pooled mean group (PMG) estimation, this study tries to examine whether in these developing countries, GDP growth has been influenced by size of market capitalization and size of market turnover in the long run which are used as proxy for stock market development. Similarly, domestic credit to private sector is used as proxy for banking sector development while assessing its long-run impact on GDP growth. Furthermore, by incorporating a dummy variable for the global financial crisis (2007–2008), this study investigates whether these economies are vulnerable to external shocks or not. The outcomes of this study find that relatively, the impact of banking sector on GDP growth has remained low in the region. Nevertheless, the development in both sectors has positively influenced economic growth in the long run. The outcomes of this study suggest that both, i.e. stock market and banking sector, are vital determinants of long-run economic growth in the South Asian countries. Therefore, to achieve the sustainable growth, policymakers need to adopt the global approach which can be ensured by improving the quality and scope of financial services in these countries.

Promoting Universal Social Policy in MICs

2020 ◽  
pp. 158-182
Author(s):  
Juliana Martínez Franzoni ◽  
Diego Sánchez-Ancochea
Keyword(s):  
Policy Design ◽  
Middle Income ◽  
Middle Income Countries ◽  
The Poor ◽  
Long Run ◽  
Poverty And Inequality ◽  
Political Struggles ◽  
The Right ◽  
The Impact

Most middle-income countries have the financial and institutional resources to reduce poverty and inequality and improve social capabilities. But what is the right policy approach to secure these goals? We argue that to be effective and successful, social policies should be universal, providing the whole population with similar, generous transfers and services. To explore how universal policies can be implemented, we distinguish between the desired policy outputs (coverage, generosity, and equity) and the specific ways to secure them. We then introduce the concept of the policy architecture and analyze its influence on long-term trajectories. The chapter considers the impact of different trajectories on universalism in the long run, distinguishing between a bottom-up strategy that starts from the poor or other alternatives that involve the non-poor from the onset. We conclude the chapter with a call for more research on the interactions between policy design and political struggles.

scholarly journals COVID-19 lockdown: implication for food security

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Henry Egbezien Inegbedion
Keyword(s):  
Food Security ◽  
Social Medium ◽  
Least Squares Regression ◽  
Cross Sectional Survey ◽  
Online Data ◽  
Cross Sectional ◽  
Empirical Examination ◽  
Content Type ◽  
Long Run ◽  
The Impact

PurposeThe purpose of the paper is to sought to know the implication of COVID-19 lockdown for food security in NigeriaDesign/methodology/approachThe study examined implication of COVID-19 lockdown for food security. The cross sectional survey research design was employed. Information was elicited from respondents through the social medium (Facebook). The question response format of the instrument was of the five-point Likert scale type. Research data were analysed using one sample t-test and least squares (regression).FindingsThe results show that COVID-19 lockdown can significantly constrain farm labour, transportation and security, while food security can be threatened by insufficient labour, transportation, farmers' morale and farm coordinationResearch limitations/implicationsA major limitation was the restriction to only online data collection method owing to the researcher's inability to administer the instrument physically as a result of the lockdown. This had an implication on randomisation.Social implicationsLong stay of people at home and away from farm activities will threaten food security on the long run and thus, precipitate social vices due to the attendant hunger and deprivationOriginality/valueIn empirical examination of the impact of COVID-19 pandemic lockdown on food security, thereby providing statistical evidence that will be useful in the sensitisation of stakeholders on the need to thread on the part of caution to avoid the possible consequences of restricting farmers' operations through the COVID-19 lockdown.

scholarly journals Premature deindustrialization and income inequality in middle-income countries

2021 ◽  
Author(s):  
Rekha Ravindran ◽  
Suresh Babu M
Keyword(s):  
Income Inequality ◽  
Fixed Effects ◽  
Value Added ◽  
Displaced Workers ◽  
Middle Income ◽  
High Productivity ◽  
Middle Income Countries ◽  
Business Market ◽  
Panel Fixed Effects ◽  
The Relationship

This paper examines the income inequality implications of a ‘premature deindustrialization’ trend in middle-income countries. To identify the premature deindustrialization phase, we arrive at five conditions based on the trends in employment and value-added share of manufacture. Among these five conditions, the first and second examine the deindustrialization pattern in economies. The last three classify the identified deindustrialization phase as premature or not. We apply panel fixed-effects and bootstrap-corrected dynamic fixed-effects models to empirically examine the relationship between premature deindustrialization and income inequality. Our findings suggest that income inequality rises with premature deindustrialization if the displaced workers are absorbed into low-productivity and informal market services (especially with employment increase in non-business market services such as trade, transport, hotels, and accommodation activities). In contrast, if high-productivity non-market services are the dominant employment provider, this helps to reduce income inequality even in the presence of premature deindustrialization.

scholarly journals Determinants of Tax Revenues: Evidence From a Sample of Lower Middle Income Countries

2018 ◽  
Vol 6 (1) ◽  
pp. 11
Author(s):  
Rachid Boukbech ◽  
Ahmed Bousselhami ◽  
Elhadj Ezzahid
Keyword(s):  
Foreign Debt ◽  
Value Added ◽  
Middle Income ◽  
Middle Income Countries ◽  
Tax Revenues ◽  
Tax Effort ◽  
Public Aid ◽  
Main Determinants ◽  
The Impact ◽  
The Relationship

Our goal in this paper is to explore the determinants of tax revenues in developing countries. After reviewing the main determinants discussed in economic literature, two models are estimated in a panel including 29 lower middle income countries over the period 2001-2014. The first concerns the tax capacity and the second the tax effort. The results show that per capita GDP and the value added of agriculture are significantly and positively correlated with tax revenues. The degree of openness has a positive but insignificant effect on tax revenues. The impact of population growth rate is negative but not significant. For the determinants of tax effort, the impacts of inflation and public spending are significant and positive. The relationship between the tax effort and the variables "public aid received" and "foreign debt" is significantly negative.

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