Inequality and growth: industry-level evidenceErman, L. & te Kaat, D., Sep-2019, In : Journal of Economic Growth. 24, 3, p. 283-308 26 p.
Research output: Contribution to journal › Article › Academic › peer-review
Using a comprehensive data set of 22 industries in 86 countries over the period 1980–2012, we empirically identify the effect of inequality on industry-level value added growth. We show that an unequal income distribution increases the growth rates of physical-capital-intensive industries and reduces the growth rates of human-capital-intensive industries by lowering human capital and raising physical capital accumulation. Our study suggests that the empirical difficulty to identify a monotonic relationship between inequality and aggregate growth reflects differences in the relative importance of human and physical capital in a country’s production structure.
|Number of pages||26|
|Journal||Journal of Economic Growth|
|Publication status||Published - Sep-2019|
- Inequality-growth nexus, Human capital, Physical capital, ECONOMIC-GROWTH, PRODUCTIVITY