Economic Complexity, Human Capital and Income Inequality: A Cross-Country Analysis

Kangkook Lee and Trung Vu

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates the relationship between economic complexity, a measure of economic structures, and income inequality. Using a cross-country OLS regression, we show that countries with economic structures geared toward complex products enjoy a lower level of inequality. Human capital is found to magnify this correlation. Different measures of human capital also have differentiated interaction effects. Concerns about the endogeneity bias of OLS estimates motivate us to estimate a dynamic panel data model, using a system GMM estimator. We find that an increase in economic complexity provokes higher inequality.

Keywords: Economic complexity; human capital; income inequality; system GMM. (search for similar items in EconPapers)
JEL-codes: F16 F40 O11 O15 (search for similar items in EconPapers)
Date: 2019-06-27
New Economics Papers: this item is included in nep-ore
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Citations: View citations in EconPapers (16)

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https://mpra.ub.uni-muenchen.de/94737/1/MPRA_paper_94737.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/94960/1/MPRA_paper_94960.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/95456/1/MPRA_paper_95456.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/94918/1/MPRA_paper_94918.pdf revised version (application/pdf)

Related works:
Journal Article: Economic complexity, human capital and income inequality: a cross-country analysis (2020)
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