An Econometric Analysis of the Links Between Income Inequality and Economic Growth

Yohannes G. Hailu (), Tesfa G. Gebremedhin () and Randall Jackson ()
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Yohannes G. Hailu: Michigan State University
Tesfa G. Gebremedhin: West Virginia University

Journal of Income Distribution, 2009, vol. 18, issue 1, 130-145

Abstract: This study investigates temporal demographic changes and income inequalities, and more importantly the relationship between income inequality and economic growth inWest Virginia. Departing from earlier studies, a regional growth model is utilized and empirically tested using county level West Virginia data (1990-2000). Results suggest that per-capita income change is positively related to population and employment changes but negatively related to income inequality. This empirical evidence indicates that higher income inequality can potentially hinder economic growth.

Keywords: income inequality; economic growth; Gini coefficient; growth modeling; population change; per-capita income (search for similar items in EconPapers)
JEL-codes: E64 R11 R23 R28 (search for similar items in EconPapers)
Date: 2009
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