scholarly journals The Resilience of Dependency Effects in Explaining Income Inequality in the Global Economy: A Cross National Analysis, 1975-1995

2002 ◽  
pp. 30-59 ◽  
Author(s):  
Linda Beer ◽  
Terry Boswell
Keyword(s):  
Income Inequality ◽  
Income Distribution ◽  
Foreign Investment ◽  
Global Economy ◽  
Capital Investment ◽  
National Income ◽  
Well Being ◽  
Linear Regression Models ◽  
Populations At Risk ◽  
National Analysis

The contemporary era is one of both accelerated economic globalization and rising inequality. There is an increasing awareness among both academic scholars and development professionals that globalization puts certain populations at risk. However, there has been inadequate theoretical analysis and a lack of up to date empirical studies that explain just how contemporary globalization a?ects inequality and the well being of individuals. This study explores the conditions under which TNC penetration and other globalization processes in?uence change in domestic income distribution. Its aim is to investigate whether theoretical models that have proven successful in explaining di?erences in income inequality cross-sectionally also allow for an understanding of the dynamics of income distribution during the 1980s and early 1990s, an era characterized by a dramatic acceleration of globalization. We present an analysis of change in national income distribution using linear regression models with a panel design. This study suggests that dependence on foreign investment as a development strategy, especially compared to domestic and human capital investment, may be misguided for nations concerned with equality. Net of other factors, foreign investment dependence bene?ts the elite segments of the income-earning population over the poorer eighty percent. Our analysis provides evidence of a shift in capital/labor relations brought about by globalization that has signi? cantly contributed to the rise in income inequality seen throughout the world.

scholarly journals National Income Inequality, Society, and Multinational Enterprises

2018 ◽  
pp. 219-241
Author(s):  
Nathaniel C. Lupton ◽  
Guoliang Frank Jiang ◽  
Luis F. Escobar
Keyword(s):  
Income Inequality ◽  
Foreign Investment ◽  
Research Agenda ◽  
Multinational Enterprises ◽  
National Income ◽  
Entry Mode ◽  
National Differences ◽  
Security Costs ◽  
Positive Effect ◽  
Different Levels

This chapter calls for understanding the perspective of multinational enterprises (MNEs) on international differences in income inequality. The authors set a research agenda on how national differences in income inequality influence MNE expansion strategies. Applying a transaction cost framework, both negative and positive economic outcomes of income inequality, from the MNE's perspective, are identified. Low levels of income inequality may deter foreign investment, as MNEs prefer countries where they incur lower levels of transaction costs arising from interactions with various market and non-market actors. However, the positive effect of income inequality on location attractiveness will likely diminish at higher levels of inequality when benefits are increasingly offset by additional monitoring, bargaining and security costs owing to instability and conflict. The chapter further explores the implications for level of MNE equity applied in the choice of entry mode under different levels of income inequality.

scholarly journals PERTUMBUHAN EKONOMI, KETIMPANGAN PEDAPATAN DAN DESENTRALISASI DI INDONESIA

KINERJA ◽  
2016 ◽  
Vol 20 (1) ◽  
pp. 53
Author(s):  
Lestari Agusalim
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Linear Regression ◽  
Income Distribution ◽  
Gross Domestic Product ◽  
Gini Index ◽  
National Income ◽  
Secondary Data ◽  
Independent Variables ◽  
Regression Approach

AbstrakPenelitian ini bertujuan untuk mengkaji pengaruh desentralisasi dalam mendistribusikan pendapatan nasional untuk mengurangi ketimpangan pendapatan di Indonesia. Data yang digunakan adalah data sekunder, yaitu PDB sebagai representasi pendapatan nasional dan data indeks gini sebagai representasi tingkat ketimpangan pendapatan dengan rentang waktu 1978-2015. Metode analisis menggunakan regresi linear dengan pendekatan OLS dimana Indeks gini digunakan sebagai variabel dependen, dan PDB sebagai variabel independen. Selain itu, terdapat variabel independen lainnya, yaitu variabel dummy desentralisasi yang berguna untuk mengetahui pengaruh desentralisasi terhadap ketimpangan pendapatan. Hasil analisis menunjukkan bahwa dari aspek ekonomi, desentralisasi belum mampu mendistribusikan pertumbuhan ekonomi untuk memperkecil ketimpangan pendapatan masyarakat.Kata Kunci: Pertumbuhan Ekonomi, Ketimpangan Pendapatan, DesentralisasiAbstractThis research aims to analyze the effect of decentralization on national income distribution and the reduce of income Inequality in Indonesia. This research used secondary data with gross domestic product (GDP) representing national income and gini index data representing income inequality from 1978 to 2015. An OLS Linear Regression approach was employed where the gini index was the dependent variable, and the independent variables were GDP and the Dummy for decentralization implementation. The result revealed that decentralization had not been able to distribute economic growth to minimize income Inequality.Keywords: Economic Growth, Income Inequality, Decentralization

scholarly journals Impact of Income Distribution on Social and Economic Well-Being of the State

2020 ◽  
Vol 12 (1) ◽  
pp. 429 ◽  
Author(s):  
Yuriy Bilan ◽  
Halyna Mishchuk ◽  
Natalia Samoliuk ◽  
Halyna Yurchyk
Keyword(s):  
Income Inequality ◽  
Income Distribution ◽  
Large Scale ◽  
Well Being ◽  
Distribution Analysis ◽  
Eu Member States ◽  
Rights Protection ◽  
Property Rights Protection ◽  
Structural Indicators ◽  
Economic Well Being

Income distribution can cause large-scale transformations in human resources structure, essential changes of economic outputs via its impact on life satisfaction and motivation of work. Thus, the overall objective of this research is to improve methodological tools of income distribution analysis based on identifying the links between different structural indicators of income inequality and the most essential features of social and economic well-being. We conducted comparative analysis of EU Member States and Ukraine. We used structural analysis based on two forms of income distribution—functional (share of “labour” in Gross domestic product - GDP) and household one (ratio of incomes measured by special decile coefficients) to identify income inequality and inconsistencies in distributive strategies. By grouping European countries according to economic well-being (described as GDP per capita) and inequality in income distribution (based on Gini coefficient), we determined apparent tendencies in distributive policies and revealed links between income distribution and connected social-economic features of well-being. We conclude that countries with the most stable and clear patterns in income distribution have distinct connections between the share of labour costs in GDP and successes in social and economic spheres, including human development level, property rights protection, GDP growth, possibilities for taxation and budgeting of social programmes.

Salaries and the logic of national income distribution in a market economy – described using a simple model

2020 ◽  
Vol 63 (3) ◽  
pp. 69-112
Author(s):  
Jerzy Żyżyński ◽  
Keyword(s):  
Simple Model ◽  
Income Distribution ◽  
Structural Changes ◽  
International Comparisons ◽  
National Income ◽  
Value Added ◽  
Well Being ◽  
Added Value ◽  
Labor Costs ◽  
Production Cycles

The level of prosperity available is the value of what is produced in the economy. This is a general truth, while the level of well-being of community members is a consequence of the value added and the rules and mechanisms of national income distribution. The purpose of the paper is to show the macroeconomic principles of the division of the generated GDP value, based on the example of a simple model of the economy in a classic style: the economy is presented as the Great Bakery, which produces loaves of bread shared between employees and its owner, the Baker. The author uses this model to demonstrate the consequences of the division of the generated surplus, which is the Baker’s profit from three sources: development-oriented investments and the savings associated with them, the public sector and exportation. The author shows the structural consequences of reducing wages and shifting the tax burdens to the employees. He proves that the reduction of labor costs should be accompanied by an increase in the tax burdens imposed on companies – the Baker in his model. These rules of division have macroeconomic consequences and the author shows the effects for Poland’s position in a group of countries, presented as international comparisons (mainly OECD countries). The author shows that one of the key factors determining prosperity is the place of industry in the product development cycles produced by the global division of production. The amount of added value obtained at various stages of these production cycles is illustrated by the so-called smile curve. The author shows the international division of labor has led to the location of the industries of post-communist countries, including Poland, around the minimum of this curve. This causes the average level of wages and, consequently, welfare to be low. The analysis leads to the conclusion that a policy of structural changes is needed, one that will shape this division so that the country regains full production cycles and thus strengthens its economy. The author discusses the simplified thesis formulated by Jeffrey Sachs that sustainable development is the most important for prosperity. The author justifies the thesis that it is not so much development as the amount of added value generated by industry and the mechanisms of its distribution, and points out that, as Justin Yifu Lin observes, it is the structural changes which will lead to an increase in added value and modifications in the principles of its distribution, so as to increase social well-being.

scholarly journals Income Distribution, Market Structure, and Individual Welfare

2009 ◽  
Vol 9 (1) ◽  
Author(s):  
Alexander Tarasov
Keyword(s):  
Income Inequality ◽  
Income Distribution ◽  
Market Structure ◽  
Poverty Reduction ◽  
Monopolistic Competition ◽  
Well Being ◽  
Welfare Gains ◽  
The Poor ◽  
Heterogenous Firms ◽  
Economic Well Being

This paper explores how income distribution affects market structure, prices, and economic well-being of different consumer groups. I consider a general equilibrium model of monopolistic competition with free entry, heterogenous firms and consumers that share identical but non-homothetic preferences. The results in the paper suggest that poverty reduction might be of a greater importance than lowering income inequality, as lower income inequality does not necessarily lead to welfare gains of the poor. In particular, I show that higher income inequality may benefit the poor via a trickle-down effect operating through the entry of firms into the market.

scholarly journals Does Income Inequality Create Excessive Threats to the Sustainable Development of Russia? Evidence from Intercountry Comparisons via Analysis of Inequality Heatmaps

Economies ◽  
2021 ◽  
Vol 9 (4) ◽  
pp. 166
Author(s):  
Mikhail Lvovitch Dorofeev
Keyword(s):  
Sustainable Development ◽  
Income Inequality ◽  
Income Distribution ◽  
Government Regulation ◽  
National Income ◽  
Historical Analysis ◽  
Wealth Inequality ◽  
Tax Rates ◽  
The Sustainable Development ◽  
The World

The paper explored the problem of income inequality in Russia in the context of the sustainable development of Russia. The research starts from the historical analysis of income inequality dynamics in Russia. Then, we discussed the problem of the inconsistency of data, comparing different sources (official data from the Rosstat database and alternative data from the World inequality database). The purpose of this research was to assess Russian specifics of income inequality and answer the question of if the income inequality in Russia is excessively high and needs extra government regulation in order to reach the trajectory of advanced sustainable development. To this end, we made intercountry comparisons and used the method of building income inequality heatmaps basing on a dataset from the World Inequality Database. Our sample includes the per-adult equivalent of household market income distribution in 27 developed and developing countries and world regions. The result of the research was that there are many countries in the world wherein the differentiation of income exceeds Russia’s. Russian income inequality is lower than the world average, but the structure of the Russian household income distribution stands out by an extreme concentration of national income in the hands of the top 1%. We supported our results via the independent data from the Credit Suisse wealth inequality report, connecting a record level of wealth inequality in Russia with its problem of top 1% income inequality. It is recommended to gradually increase marginal tax rates on the income and wealth of the top 1% and continue developing an effective progressive tax system in Russia.

scholarly journals Governance and Income Inequality

2006 ◽  
Vol 45 (4II) ◽  
pp. 751-760 ◽  
Author(s):  
Saima Shafique ◽  
Rashida Haq
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Developing Countries ◽  
Economic Policy ◽  
Income Inequality ◽  
Income Distribution ◽  
Growth And Development ◽  
Well Being ◽  
Low Level ◽  
The Poor

Major problems of developing countries are unequal income distribution and low growth rate, which affect their welfare aspects. It was implicitly assumed that whenever we achieve target of higher growth rate, benefit of growth would automatically trickle down to the poor. History of developing countries shows that the rich benefited more than the poor as evidenced by rising income inequality during the period of higher economic growth. The economic policy changes are often triggered by the logic of low level of equilibrium of output level, employment and income distribution. To overcome this low level of equilibrium trap, government often adopt polices so as to achieve high level of income and employment growth and development, and equitable income distribution. Coherent policy instruments are essential to meet these policy targets. Impact of any macro economic policy has been examined by studying its impact on economic growth and income distribution. In recent years polices have been directed toward reducing the level of poverty and inequality through raising quality of life in society by providing efficient and effective governance. This new economic philosophy has resulted in a massive change in the policy orientation of countries; the priority is now centred on issue of governance and focus is now shifted towards a qualitative nature of its growth and development. According to Sen (1983), the realisation of human capabilities, that enlarge the range of human choices, is essential for a broader notion and measure of economic well-being. The institutional frame work is then considered as one of the essential elements for translating growth and well-being into a sustainable process.

scholarly journals The role of perceptions about trade and inequality in the backlash against globalization

2021 ◽  
Vol 1 (12) ◽  
Author(s):  
Barbara Dluhosch
Keyword(s):  
Income Inequality ◽  
Income Distribution ◽  
Well Being ◽  
Western Hemisphere ◽  
Subjective Well Being ◽  
Cross Sectional ◽  
Economic Implications ◽  
Individual Level ◽  
Subjective Element

AbstractMany countries in the Western hemisphere are experiencing a political backlash against globalization. When explaining this phenomenon, much of the extant research draws on the distributional effects of international competition, in particular the opposition to trade by those who are adversely affected. Using cross-sectional data on subjective well-being from the World Values Survey and the European Values Study and combing these self-reports with trade and incomes data, this paper contributes to this strand of research by focusing on the subjective element in the formation of anti-trade sentiments. It thus explores how the role of international trade in the income distribution is being perceived at the individual level. Simulations based on the data reveal that matters of income inequality are evaluated differently, depending on how deeply the respective economy is integrated into world markets: results suggest that the extent of trade globalization amplifies any negative effect of income inequality on subjective well-being. If the role of international openness in the income distribution is perceived to be more pronounced than it actually is, the subjective element has wider politico-economic implications; it carries the risk of costly anti-trade policies without necessarily narrowing the income distribution.

GLOBAL TRENDS IN INCOME DISTRIBUTION: LONG-RUN INFLUENCES ON INCOME INEQUALITY

2019 ◽  
Vol 7 (7-12) ◽  
Author(s):  
THOMAS OBST
Keyword(s):  
Income Inequality ◽  
Income Distribution ◽  
National Income ◽  
Personal Income ◽  
Three Dimensions ◽  
Wage Dispersion ◽  
Comprehensive Overview ◽  
Global Trends ◽  
Developed Economies ◽  
Labour Share

This paper provides a comprehensive overview of the development in income distribution and outlines its major long-term trends of 23 countries worldwide. These countries are clustered in four groups covering the core advanced, the Nordic, the emerging, and the least developed economies of the world. This paper applies different measures to analyse income distribution in three dimensions: national income, functional income distribution, and personal income distribution. Depending on the indicators applied the time period ranges between 1960 and 2012. The empirical analysis shows that increases in national incomes are most pronounced in the advanced economies. The emerging economies also exhibit an upward trend in national income, but it has been less substantial. The least developed economies, however, have been detached from this trend and remain isolated. Moreover, this paper illustrates that there has been an enormous re-distribution of income. During the last three decades, the labour share of income has declined in nearly all countries under study. This development went hand in hand with increased personal income inequality. Disposable income inequality and market income inequality have both increased over the past 30 years. Wage dispersion also rose substantially contributing to greater income inequality. Additionally, the escalation of top income shares as well as the expansion of low paid employment has led to a growing gap between the top and the bottom income earners. This analysis also presents important interlinks between greater income inequality, the fall of the wage share, and increasing wage dispersion.

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