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A META‐ANALYSIS ON THE RELATIONSHIP BETWEEN INCOME INEQUALITY AND ECONOMIC GROWTH
Author(s) -
De Dominicis Laura,
Florax Raymond J. G. M.,
De Groot Henri L. F.
Publication year - 2008
Publication title -
scottish journal of political economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.4
H-Index - 46
eISSN - 1467-9485
pISSN - 0036-9292
DOI - 10.1111/j.1467-9485.2008.00470.x
Subject(s) - economics , inequality , economic inequality , econometrics , meta analysis , homogeneous , income inequality metrics , sample (material) , estimation , meta regression , empirical research , panel data , social inequality , demographic economics , development economics , statistics , mathematics , medicine , mathematical analysis , chemistry , management , chromatography , combinatorics
In recent years there is a growing interest in determining the impact of inequality on economic growth. Theoretical papers as well as empirical applications have, however, produced controversial results. Although there is a considerable part of the literature that considers inequality detrimental to growth, more recent studies have challenged this result and found a positive effect of inequality on growth. In this paper, we provide a contribution to the empirical puzzle by using meta‐analysis to systematically describe, identify and analyse the variation in outcomes of empirical studies. We find that estimation methods, data quality and sample coverage systematically affect the results. The results point out that it will be particularly useful to increasingly focus research on determining the impact of income inequality on economic growth using single‐country data at the regional level, or a relatively homogeneous set of countries with adequate controls for country‐wide differences in economic, social and institutional characteristics.