RT info:eu-repo/semantics/article
T1 Unfair inequality and growth
A1 Marrero Díaz, Gustavo Alberto
A1 Rodríguez Hernández, Juan Gabriel
A2 CEDESOG
K1 Unfair inequality
K1 growth
K1 human capital
K1 poverty
AB Fighting against economic inequality is one fundamental social goal in the agendas of most governments. However, recent studies highlight that people actually prefer unequal societies, as they accept inequality generated by an individual's effort and wish to reduce only unfair inequality (generated by factors beyond an individual's control). This distinction might help to explain the fundamental unsolved question about whether inequality is good or bad for growth: unfair inequality (UI) could be growth-deterring, while fair inequality (FI) might be growth-enhancing. We derive a reduced-form growth equation from a stylized overlapping-generations model with human capital that includes FI, UI, and poverty. Then, using an instrumental variable approach, we show for alternative samples and inequality measures at the worldwide level that the estimated coefficient associated with UI is always negative, while the coefficient of total inequality increases when UI is included in the regression. Moreover, we find that poverty mediates this relationship because the higher the poverty rate, the smaller the impact of either type of inequality on growth.
YR 2023
FD 2023
LK http://riull.ull.es/xmlui/handle/915/34948
UL http://riull.ull.es/xmlui/handle/915/34948
LA en
DS Repositorio institucional de la Universidad de La Laguna
RD 12-nov-2024