When is there a Kuznets curve?

Branimir Jovanovic

Department of Economics and Statistics Cognetti de Martiis. Working Papers from University of Turin

Abstract: This paper investigates when is there a Kuznets curve, that is, under which conditions economic growth is associated with a decline in income inequality. The analysis is done on a sample of 26 ex-socialist countries from Eastern Europe, during the post-socialist years. These countries had very similar characteristics when socialism collapsed, but very di¤erent experiences with the transition afterwards, which makes them a suitable group for analysing the relationship between GDP and in- equality. We focus on four factors that may shape this relationship - labour market institutions, market power of companies, social bene?ts and taxes. Findings suggest that inequality (before government re- distribution) declines with economic growth when labour markets are more regulated, anti-monopoly policy is more exective and taxes are higher. Taxes seem to be the single most important factor.

Pages: 49 pages
Date: 2015-12
New Economics Papers: this item is included in nep-gro and nep-tra
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:uto:dipeco:201550

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