Critical percentiles for equalizing growth

Laurence Roope

No 2015-16, CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford

Abstract: This paper provides precise conditions under which incremental growth reduces inequality. Critical points are derived, above which incremental income increases inequality, and below which it decreases inequality. According to the Gini coefficient, the lower bound for this critical point is the median individual. Surprisingly, critical points associated with ‘absolute’ and ‘centrist’ measures of inequality are sometimes higher than those implied by ‘relative’ measures. The results are illustrated using data from UNU-WIDER’s World Income Inequality Database. According to the Gini, critical points are typically found to lie between the 62nd and 85th percentiles, in the least, and most, unequal countries, respectively.

Keywords: growth; inequality; inequality measurement (search for similar items in EconPapers)
JEL-codes: D31 D63 O40 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-gro
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:csa:wpaper:2015-16

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