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The heterogeneous relationship between income and inequality: a panel co-integration approach

Svenja Flechtner () and Claudius Graebner ()
Additional contact information
Svenja Flechtner: University of Siegen, Germany, http://www.svenjaflechtner.de/
Claudius Graebner: Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria, https://claudius-graebner.com/

Authors registered in the RePEc Author Service: Claudius Gräbner ()

No 91, ICAE Working Papers from Johannes Kepler University, Institute for Comprehensive Analysis of the Economy

Abstract: We study the relationship between per-capita income and income inequality with a heterogeneous panel co-integration approach. We extend previous studies in two dimensions: first, we compile a more extensive data set for 61 countries over 26-51 years and consider measures for both pre-tax and post-tax income inequality; second, we take into account country heterogeneity rather than relying on average panel estimates alone. We find a negative group-mean based relationship using pre-tax income inequality, but no such relationship for post-tax income inequality. Moreover, we find estimates on the country level to be heterogeneous in both cases.

Keywords: Development; Inequality; Growth; Panel co-integration (search for similar items in EconPapers)
Pages: 9 pages
Date: 2019-02
New Economics Papers: this item is included in nep-gro
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Persistent link: https://EconPapers.repec.org/RePEc:ico:wpaper:91

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