Assessment of Relationship between Growth and Inequality: Micro Evidence from Thailand

Hyeok Jeong ()

No 05.20, IEPR Working Papers from Institute of Economic Policy Research (IEPR)

Abstract: This paper shows that growth and income distribution dynamics are closely linked through occupation, financial intermediation, and education. We use the micro data from Thailand for 1976-1996. The compositional changes across these characteristics account for half of the Thai inequality increase and forty percent of the Thai growth and poverty reduction. Financial deepening and educational expansion contributed to increasing inequality while occupational transformation contributed to poverty alleviation. The changes in income gaps across the income-status groups, that is, divergence and then convergence, give rise to inverted- U inequality dynamics. These two growth-related components of inequality dynamics, composition and income-gap dynamics, explain virtually all the change in overall inequality, except its initial rise. Thus, inequality dynamics can be viewed as integral part of wider process of growth as Kuznets speculated.

Keywords: Kuznets Dynamics; Growth; Inequality; Poverty (search for similar items in EconPapers)
JEL-codes: D31 O41 I32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-sea
Date: 2005-03
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http://www.usc.edu/dept/LAS/economics/IEPR/Working ... 5.20_%5bJeong%5d.pdf First version, 2005 (application/pdf)

Related works:
Journal Article: ASSESSMENT OF RELATIONSHIP BETWEEN GROWTH AND INEQUALITY: MICRO EVIDENCE FROM THAILAND (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:scp:wpaper:05-20

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