Inequality of Opportunity, Inequality of Income and Economic Growth /

We posit that the relationship between income inequality and economic growth is mediated by the level of equality of opportunity, which we identify with intergenerational mobility. In economies characterized by intergenerational rigidities, an increase in income inequality has persistent effects-for...

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Autor principal: Aiyar, Shekhar
Altres autors: Ebeke, Christian
Format: Revista
Idioma:English
Publicat: Washington, D.C. : International Monetary Fund, 2019.
Col·lecció:IMF Working Papers; Working Paper ; No. 2019/034
Accés en línia:Full text available on IMF
Descripció
Sumari:We posit that the relationship between income inequality and economic growth is mediated by the level of equality of opportunity, which we identify with intergenerational mobility. In economies characterized by intergenerational rigidities, an increase in income inequality has persistent effects-for example by hindering human capital accumulation- thereby retarding future growth disproportionately. We use several recently developed internationally comparable measures of intergenerational mobility to confirm that the negative impact of income inequality on growth is higher the lower is intergenerational mobility. Our results suggest that omitting intergenerational mobility leads to misspecification, shedding light on why the empirical literature on income inequality and growth has been so inconclusive.
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Descripció física:1 online resource (23 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Accés:Electronic access restricted to authorized BRAC University faculty, staff and students