KUZNETS’S HYPOTHESIS AND THE DATA CONSTRAINT

Argentino Pessoa

FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: Five decades ago, Simon Kuznets expressed an important hypothesis about the relationship between the degree of income inequality within a country and its level of economic development: the Kuznets’s inverted-U hypothesis. The lack of longitudinal data has forced the use of cross-section or pooled datasets in order to draw conclusions about that relationship. In the present note we highlight the lack of international comparability of surveys where the measures of inequality are based, and we show two main findings: 1) data comparability goes on constituting a problem, particularly in what respects to the different welfare indicators used in national surveys, and 2) the procedure usually used to minimize the problem of noncomparability is likely to enforce the bias rather than to solve it.

Keywords: Inequality; Kuznets’s hypothesis; economic development; income distribution (search for similar items in EconPapers)
JEL-codes: C21 D31 O15 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2008-02
New Economics Papers: this item is included in nep-dev
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Persistent link: https://EconPapers.repec.org/RePEc:por:fepwps:267

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