Income inequality and complexity of the productive structure: New evidence at the world level

Verónica Amarante, Bibiana Lanzilotta and Joaquín Torres-Pérez

Economic Analysis and Policy, 2024, vol. 84, issue C, 628-645

Abstract: This paper investigates if the complexity of a country's productive structure can help explain variations in income inequality. We use country panel data on 126 countries from 1995 to 2018 and approximate a country's productive structure through the Economic Complexity Index and income inequality from the World Income Inequality Database. Our results found that the relationship between economic complexity and income inequality is not homogenous across countries and, that at the world level, is not linear. Instead, when the level of complexity of the economy is low, increases in complexity mainly lead to an increase in economic inequality. At higher levels of economic complexity, its effect on income inequality becomes negative. This means that economic complexity improves equality after certain thresholds, which seems to reflect the situation of high-income economies.

Keywords: Income inequality; Productive structure; Economic complexity; Panel data (search for similar items in EconPapers)
JEL-codes: O11 O15 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0313592624002364
Full text for ScienceDirect subscribers only

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:eee:ecanpo:v:84:y:2024:i:c:p:628-645

DOI: 10.1016/j.eap.2024.09.014

Access Statistics for this article

Economic Analysis and Policy is currently edited by Clevo Wilson

More articles in Economic Analysis and Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().