Arbetsrapport, Institutet för Framtidsstudier - Institute for Futures Studies
Income Inequality and Growth: a Panel Study of Swedish Counties 1960-2000
Abstract: This paper explores the relationship between income
inequality and growth using panel data on Swedish counties from 1960-2000.
Compared to standard methods of estimating this relationship yearly
regional level data are used, and inequality is allowed to be endogenous.
We find a significant positive impact of inequality on growth, but the
magnitude of the effect decreases with the length of the growth period
studied. When allowing income inequality to be endogenous, using a panel
2SLS IV estimation, we find positive effect of inequality on 1 to 5-year
growth rates, when significant, whereas the effect on 10-year growth rates
are not clear cut.
Keywords: Income inequality; regional economic growth; panel data; (follow links to similar papers)
JEL-Codes: D31; O15; O40; (follow links to similar papers)
43 pages, March 2005
ISSN 1652-120X ISBN 91-89655-61-3
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