The Impact of Country Risk on Income Inequality: A Multilevel Analysis

Chi-Chuan Lee and Chien-Chiang Lee ()

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2018, vol. 136, issue 1, No 7, 139-162

Abstract: Abstract This paper investigates the influence of country risks, including economic, financial, and political risks, on income inequality for a broad sample of 110 countries. Our empirical results reveal that higher economic and political risks generally lead to higher inequality. Lower income country appears to have higher income inequality. Furthermore, with the consideration of the non-monotonic effect of country risk, the improvement of income distribution is only sustainable dynamically after a certain threshold level of country risk has been brought down. Policymakers should improve the level of country stability by exploring the benefits of country risk reduction in order to improve income distribution.

Keywords: Economic risk; Financial risk; Political risk; Income inequality; Panel data (search for similar items in EconPapers)
JEL-codes: C33 G28 O15 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (17)

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DOI: 10.1007/s11205-016-1534-8

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