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Inequality of opportunity and growth

Gustavo Marrero () and Juan Rodríguez ()

Journal of Development Economics, 2013, vol. 104, issue C, 107-122

Abstract: Theoretical and empirical studies exploring the effects of income inequality upon growth reach a disappointing inconclusive result. This paper postulates that one reason for this ambiguity is that income inequality is actually a composite measure of inequality of opportunity and inequality of effort. They may affect growth through opposite channels, thus the relationship between inequality and growth depends on which component is larger. Using the PSID database for the U.S. in 1970, 1980 and 1990 we find robust support for a negative relationship between inequality of opportunity and growth, and a positive relationship between inequality of effort and growth.

Keywords: Income inequality; Inequality of opportunity; Economic growth (search for similar items in EconPapers)
JEL-codes: D63 E24 O15 O40 (search for similar items in EconPapers)
Date: 2013
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Working Paper: Inequality of opportunity and growth (2010) Downloads
Working Paper: Inequality of Opportunity and Growth (2009) Downloads
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DOI: 10.1016/j.jdeveco.2013.05.004

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