Social Capital and Income Inequality in OECD Countries: Causality Evidence

Nalleli Patricia Bolaños Pérez () and Edgar J. Saucedo-Acosta ()
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Nalleli Patricia Bolaños Pérez: University of Veracruz
Edgar J. Saucedo-Acosta: University of Veracruz

A chapter in Business Development and Economic Governance in Southeastern Europe, 2022, pp 35-52 from Springer

Abstract: Abstract Social capital has declined in both developments and in other developing economies, while income inequality has tended to increase. Recent studies show the correlation between social capital and income inequalities, while few studies analyse the direction of causality at a macro level. This paper aims to investigate the causal relationship between generalised trust, as well as income inequalities in 23 economies belonging to the Organisation for Economic Cooperation and Development (OECD) from 2000 to 2019. In this study, we use the application of a fully modified least squares model (FMOLS) and the canonical correlation regression estimator (CCR). In addition, the unit root and cointegration test is applied before applying the Granger causality test. The findings show that there is a bidirectional relationship between social capital and income inequality.

Keywords: Inequality; Generalised trust; Granger causality test; D31; CO1; 057 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-05351-1_2

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DOI: 10.1007/978-3-031-05351-1_2

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