Income Inequality, Urban Size and Economic Growth in OECD Regions

Vicente Royuela, Paolo Veneri and Raul Ramos

No 2014/10, OECD Regional Development Working Papers from OECD Publishing

Abstract: The purpose of this paper is to understand how income inequality is associated with economic growth in OECD regions and whether the degree and type of urban concentration affects this relationship. Both income inequality and urban concentration can be seen as patterns of resource allocation that are particularly interlinked at the regional level. We combine household survey data and macroeconomic databases, covering a period ranging from 2004 to 2012 for comparable regions in 15 OECD countries. Econometric results show that, at least for the short period under consideration, there is a general negative association between inequalities and economic growth, especially since the start of the economic crisis. This relationship is sensitive to the type of urban structure. Higher inequalities seem to be more detrimental for growth in large cities, while regions characterised by small cities and rural areas are less affected.

Keywords: economic growth; inequality; OECD regions; urban (search for similar items in EconPapers)
JEL-codes: O15 R11 R12 (search for similar items in EconPapers)
Date: 2014-12-22
New Economics Papers: this item is included in nep-geo, nep-gro and nep-ure
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:oec:govaab:2014/10-en

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