scholarly journals In whom do you trust? Analysing the Role of Social Capital in Reducing Income Inequality-A Panel Data Approach

2017 ◽  
pp. 134-160
Author(s):  
Moina Rauf Et al.,
Keyword(s):  
Social Capital ◽  
Panel Data ◽  
Income Inequality ◽  
Fixed Effects ◽  
Good Governance ◽  
Cooperative Behavior ◽  
Panel Data Analysis ◽  
Critical Role ◽  
Social Spending ◽  
Trust Networks

In this study, we examine if social capital, in the form of trust, networks, and institutions, affects income inequality across countries. We aim to build a narrative, supported by empirics that institutions embedded deeply in the fabric of the society play a critical role in motivating policies towards inclusive growth and distributive initiatives by the state. Policies aimed at distribution are a conscious choice that is driven by the society’s level of trust in each other. Higher levels of trust among citizens leads to cooperative behavior and solves social dilemmas thus reducing free riding problems. Also, high trusting and cooperative citizens are more likely to push governments for reforms and policies that aim at the provision of public goods and increased social spending. Voters’ limited acceptance of morally questionable behavior among politicians restrains rent-seeking problems in politics and encourages good governance. The study uses panel data analysis utilizing data from World Values Surveys. The basic model used for testing the relationship between social capital and income inequality is through the fixed effects models. For developing a meaningful analysis, we distinguish between civil social capital and government social capital. We establish that higher levels of generalized trust (civil social capital) among citizens leads to a reduction in income inequalities. The significance of social capital is reiterated when the variables for government social capital are introduced in the model. Our study establishes that indicators of government social capital, particularly lower corruption levels have a significant impact on reducing income inequality.

scholarly journals Does social capital affect wages? A panel data analysis of causal mechanisms

2020 ◽  
Author(s):  
Gerhard Krug ◽  
Paul Schmelzer ◽  
Mark Trappmann
Keyword(s):  
Social Capital ◽  
Panel Data ◽  
Job Search ◽  
Fixed Effects ◽  
Panel Data Analysis ◽  
Positive Association ◽  
Job Interviews ◽  
Cross Sectional ◽  
Causal Mechanisms ◽  
Panel Data Regression

Many studies document the positive association between accessed social capital and wages. It is widely accepted that the underlying relationship is causal. However, most studies use cross-sectional data, and only a few test causal mechanisms. In our analysis, we first test a broad range of social capital indicators by applying fixed-effects panel data regression to a sample of currently employed and a sample of newly employed individuals. Second, we test reservation wages, network search, being offered a job without prior job search, and the number of job interviews as some of the theoretical mechanisms put forward to explain positive social capital effects. Overall, we find no empirical evidence for wage effects of the social capital measure and no evidence that any of the proposed mechanisms are empirically relevant.

Credit Market Depth and Income Inequality in Vietnam: A Panel-Data Analysis

2016 ◽  
pp. 5-18
Author(s):  
Hoi Le Quoc ◽  
Hoi Chu Minh
Keyword(s):  
Data Analysis ◽  
Panel Data ◽  
Income Inequality ◽  
Financial Development ◽  
Inflection Point ◽  
Panel Data Analysis ◽  
Credit Market ◽  
Method Of Moment ◽  
Market Depth ◽  
Generalized Method Of Moment

Financial development could exert various effects on income distribution of a country. By employing Generalized Method of Moment, this paper aims at examining the impacts of credit market depth, one of most used financial development barometers, on income inequality in Vietnam. The empirical findings show that expanding credit market in the country could lead to higher income inequality. We have not found evidence that supports the hypothesis of an inverted U-shaped relation ever introduced by Greenwood and Jovanovich, although this hypothesis may still hold in a sense that Vietnam has not reached to the inflection point to generate such a curve alike.

The effects of debt restructurings on income inequality in the developing world

2021 ◽  
pp. 135406612110014
Author(s):  
Glen Biglaiser ◽  
Ronald J. McGauvran
Keyword(s):  
Developing Countries ◽  
Panel Data ◽  
Income Inequality ◽  
Income Distribution ◽  
Government Spending ◽  
Tax Reform ◽  
Social Spending ◽  
The Poor ◽  
The Rich ◽  
The Impact

Developing countries, saddled with debts, often prefer investors absorb losses through debt restructurings. By not making full repayments, debtor governments could increase social spending, serving poorer constituents, and, in turn, lowering income inequality. Alternatively, debtor governments could reduce taxes and cut government spending, bolstering the assets of the rich at the expense of the poor. Using panel data for 71 developing countries from 1986 to 2016, we assess the effects of debt restructurings on societal income distribution. Specifically, we study the impact of debt restructurings on social spending, tax reform, and income inequality. We find that countries receiving debt restructurings tend to use their newly acquired economic flexibility to reduce taxes and lower social spending, worsening income inequality. The results are also robust to different model specifications. Our study contributes to the globalization and the poor debate, suggesting the economic harm caused to the less well-off following debt restructurings.

Impact of Trade and FDI on Income Inequality: A Panel Data Analysis

2021 ◽  
Vol 23 (3) ◽  
pp. 111-131
Author(s):  
Jae Hwa Lee ◽  
Woo Sung Cho
Keyword(s):  
Data Analysis ◽  
Panel Data ◽  
Income Inequality ◽  
Panel Data Analysis

Globalization and health: An empirical investigation

2019 ◽  
Vol 19 (3) ◽  
pp. 207-224 ◽  
Author(s):  
Vishalkumar J Jani ◽  
Nisarg A Joshi ◽  
Dhyani J Mehta
Keyword(s):  
Health Status ◽  
Panel Data ◽  
Fixed Effects ◽  
Panel Data Analysis ◽  
Health Indicators ◽  
Developed Countries ◽  
Social Dimension ◽  
Three Dimensions ◽  
Infant Mortality Rate ◽  
The Impact

This article empirically examines the impact of globalization on the health status of countries by using panel data. Unlike previous studies, it has attempted to use three different dimensions of globalization and estimate their impact on health status measured by infant mortality rate and life expectancy. It also introduces an initial level of development status as an explanatory variable and found that it has an important role. The fixed effects panel data analysis shows that globalization has a positive impact on the health indicators. Out of the three dimensions of globalization, namely, economic, social and political, the first one has the highest influence on health for the less developed countries. However, as one moves up the ladder of development, social dimension becomes more important. Moreover, the pace of improvement in health indicators is faster in developed countries, indicating a divergence between the developed and the underdeveloped world.

scholarly journals Mastering Panel Metrics: Causal Impact of Democracy on Growth

2019 ◽  
Vol 109 ◽  
pp. 77-82 ◽  
Author(s):  
Shuowen Chen ◽  
Victor Chernozhukov ◽  
Iván Fernández-Val
Keyword(s):  
Panel Data ◽  
Statistical Inference ◽  
Fixed Effects ◽  
State Of The Art ◽  
Panel Data Analysis ◽  
High Dimensional ◽  
Econometric Methods ◽  
Long Run ◽  
Causal Impact ◽  
The Relationship

We revisit the panel data analysis of Acemoglu et al. (forthcoming) on the relationship between democracy and economic growth using state-of-the-art econometric methods. We argue that panel data settings are high-dimensional, resulting in estimators to be biased to a degree that invalidates statistical inference. We remove these biases by using simple analytical and sample-splitting methods, and thereby restore valid statistical inference. We find that debiased fixed effects and Arellano-Bond estimators produce higher estimates of the long-run effect of democracy on growth, providing even stronger support for the key hypothesis of Acemoglu et al.

scholarly journals Determinants of Income Inequality in EU Candidate Countries: A Panel Analysis

2019 ◽  
Vol 57 (4) ◽  
pp. 397-413
Author(s):  
Vesna Bucevska
Keyword(s):  
Income Inequality ◽  
Fixed Effects ◽  
Negative Impact ◽  
Panel Data Analysis ◽  
Potential Candidate ◽  
Eu Candidate Countries ◽  
Main Determinants ◽  
The Government ◽  
The Impact ◽  
The Eu

AbstractDespite increasing income per capita, the EU candidate and potential candidate countries remain confronted with high levels of income inequality. The purpose of our paper is to identify the main determinants of income inequality among the EU candidate countries. In addition to macroeconomic factors, we also analyze the impact of demographic variables to provide more reliable estimates. Using panel data analysis with fixed effects in the period 2005-2017 for three EU candidate countries (North Macedonia, Serbia and Turkey) we find that the unemployment rate, the level of economic development and the investment rate are the main determinants whose increase leads to a bigger income differentiation in the analyzed countries. The government indebtedness has also a statistically significant, but a negative impact on income inequality. The other two macroeconomic variables in the model – the terms of trade and inflation are statistically insignificant. Among the demographic factors, population growth and education significantly affect income inequality among the EU candidate countries. The obtained results suggest that a sustainable economic growth combined with active measures in the labor market and the improvement of education level of the population could lead to more equal income distribution.

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