Assessing the impact of human capital development on income inequality in the ASEAN region: an empirical analysis

Lim Thye Goh ()
Additional contact information
Lim Thye Goh: Universiti Malaya

Eurasian Economic Review, 2025, vol. 15, issue 3, No 9, 813-844

Abstract: Abstract This study examines the role of human capital development in influencing income inequality across five ASEAN countries—Indonesia, Malaysia, the Philippines, Singapore, and Thailand—over the period from 1970 to 2019. Using an autoregressive distributed lag (ARDL) model, we explore both short- and long-term relationships between income inequality and key economic factors, including trade openness, GDP per capita, inflation, and employment. Our findings reveal that, in the long term, human capital development significantly reduces income inequality in Indonesia, Malaysia, the Philippines, and Thailand, underscoring the importance of education and skills in promoting equitable wage distribution. In Singapore, however, the effect of human capital on inequality is minimal, reflecting a mature labour market. Trade openness and GDP per capita are positively associated with income inequality in several ASEAN economies, suggesting that economic gains often benefit higher-income groups. Employment shows varied effects, reducing inequality in Singapore but increasing it in the Philippines and Thailand, where informal employment is prevalent. Targeted inflation control and progressive fiscal policies emerge as effective strategies to protect low-income households, while integrating SMEs into trade networks and expanding reskilling initiatives can ensure broader economic participation. These findings highlight the need for a policy framework combining quality-driven human capital investment, equitable trade practices, and progressive taxation. Through coordinated regional efforts, ASEAN countries can work towards reducing income disparities and fostering a more inclusive economic environment.

Keywords: Income inequality; Human capital development; ASEAN; ARDL (search for similar items in EconPapers)
JEL-codes: D33 D63 E24 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s40822-024-00309-4 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:eurase:v:15:y:2025:i:3:d:10.1007_s40822-024-00309-4

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40822

DOI: 10.1007/s40822-024-00309-4

Access Statistics for this article

Eurasian Economic Review is currently edited by Dorothea Schäfer

More articles in Eurasian Economic Review from Springer, Eurasia Business and Economics Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().