Scandinavian Working Papers in Economics
Working Papers,
University of Aarhus, Aarhus School of Business, Department of Economics
No 04-8: Inequality, Tolerance, and Growth
Christian Bjørnskov ()
Additional contact information
Christian Bjørnskov: Department of Economics, Aarhus School of Business, Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Abstract: This paper argues for the importance of individuals’ tolerance of inequality for
economic growth. By using the political ideology of governments as a measure of
revealed tolerance of inequality, the paper shows that controlling for ideology improves
the accuracy with which the effects of inequality are measured. Results show that
inequality reduces growth but more so in societies where people perceive it as being
relatively unfair. Further results indicate that legal quality and social trust are likely
transmission channels for the effects of inequality.
Keywords: Inequality; Growth; Social Capital and Social Norms
34 pages, May 27, 2004
Full text files
04-8_chbj.pdf
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