Income Inequality, Capitalism and Ethno-Linguistic Fractionalization

Jan-Egbert Sturm, Jakob de Haan and Jakob de Haan
Authors registered in the RePEc Author Service: Jakob de Haan

No 5169, CESifo Working Paper Series from CESifo

Abstract: We examine the relationship between capitalism and income inequality for a large sample of countries using an adjusted economic freedom index as proxy for capitalism and Gini coefficients based on gross-income as proxy for income inequality. Our results suggest that there is no robust relationship between economic freedom and income inequality. In addition, we analyze the relationship between income redistribution (measured by the ratio of the income distribution resulting from market processes and the income distribution after redistribution) and ethno-linguistic fractionalization. We find that the impact of ethno-linguistic fractionalization on income redistribution is conditional on the level of economic freedom: countries that have a high degree of fractionalization have less income redistribution, while capitalist countries that have a low degree of fractionalization have more income distribution.

Keywords: income inequality; redistribution; economic freedom; ethno-linguistic fractionalization (search for similar items in EconPapers)
JEL-codes: D31 D63 F02 O11 O15 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (67)

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Related works:
Journal Article: Income Inequality, Capitalism, and Ethno-linguistic Fractionalization (2015)
Working Paper: Income inequality, capitalism and ethno-linguistic fractionalization (2014)
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