Does inequality in health impede economic growth?

This paper investigates the effects of inequality in health on economic growth in low and middle income countries. The empirical part of the paper uses an original cross-national panel data set covering 62 low and middle income countries over the period 1985 to 2007. I find a substantial and relatively robust negative effect of health inequality on income levels and income growth controlling for life expectancy, country and time fixed-effects and a large number of other effects that have been shown to matter for growth. The effect also holds if health inequality is instrumented to circumvent a potential problem of reverse causality. Hence, reducing inequality in the access to health care and to health-related information can make a substantial contribution to economic growth.     

Political and Economic Inequities and the Shaping of Institutions and Redistribution

This article studies the joint effect of political and economic inequalities on redistributive taxation and institutional quality. The theoretical model suggests that income inequality, coupled with political bias in favor of the rich, decreases redistribution and lowers institutional quality. The effect of the former is to increase productive investment, and the effect of the latter is to decrease it—with resulting ambiguous implications for economic growth. Testing these predictions empirically in a panel of countries, we find that inequality has a negative effect on both institutional quality and redistribution.     

How is suicide different in Japan?

This study investigates suicide rates among OECD countries, with particular effort made to gain insight into how suicide in Japan is different from suicides in other OECD countries. Several findings emerged from fixed-effect panel regressions with country-specific time-trends. First, the impacts of socioeconomic variables vary across different gender–age groups. Second, in general, better economic conditions such as high levels of income and higher economic growth were found to reduce the suicide rate, while income inequality increases the suicide rate. Third, the suicide rate is more sensitive to economic factors captured by real GDP per capita, growth rate of real GDP per capita, and the Gini index than to social factors represented by divorce rate, birth rate, female labor force participation rate, and alcohol consumption. Fourth, female and elderly suicides are more difficult to be accounted for. Finally, in accordance with general beliefs, Japan's suicide problem is very different from those of other OECD countries. The impact of the socioeconomic variables on suicide is greater in Japan than in other OECD countries.     

Investigating the relationship between health and economic growth: Empirical evidence from a panel of 5 Asian countries

In this paper, we investigate the relationship between health and economic growth through including investment, exports, imports, and research and development (R&D), for 5 Asian countries using panel unit root, panel cointegration with structural breaks and panel long-run estimator for the period 1974–2007. We model this relationship within the production function framework, and unravel two important results. First, we find that in all four variants of the growth model, variables share a long-run relationship; that is, they are cointegrated. Second, we find that in the long-run, while health, investment, exports, EDRD (the interaction term between education and R&D), and R&D have contributed positively to economic growth, imports have had a statistically significant negative effect while education has had an insignificant effect. We draw important policy implications from these findings.     

Does Gender Inequality Reduce Growth in Sub‐Saharan African and Arab Countries?*

Abstract: This paper uses 1974 to 2001 panel data for 31 sub‐Saharan African and 10 Arab countries and Arellano–Bond estimations to empirically assess the impact on growth of an important indicator associated with MDG 3; namely the ratio of 15–24‐year‐old literate females to males. Our findings indicate that gender inequalities in literacy have a statistically significant negative effect that is robust to changes in the specification. In addition, it seems that gender inequality has a stronger effect on growth in Arab countries. Interestingly, we find that the interaction between openness to trade and gender inequality has a positive impact. This result suggests that trade‐induced growth may be accompanied by greater gender inequalities.     

Intergenerational income mobility and economic freedom

Numerous studies have found that income inequality reduces the chances of upward relative mobility (i.e., climbing up the income ladder). However, most of this work ignores the role played by institutional quality (namely, economic freedom) in determining mobility and increasing the individual's set of choices. We fill this gap by empirically testing the direct and indirect (through economic growth) impacts of economic freedom on intergenerational income mobility. We find that economic freedom has both direct and indirect effects on intergenerational income mobility, while income inequality is a strong predictor of downward income mobility. When we incorporate findings about the purely mechanical relationship between inequality and intergeneration income mobility, we find that the legal system and property rights component of economic freedom matters more than inequality. These results suggest that good institutions can increase intergenerational income mobility.     

Does Rising Income Inequality Reduce Life Expectancy? New Evidence for 26 European Countries (1995–2014)

An open debate these days is about how national income inequality could affect individuals’ health outcomes. Therefore, the present study aims to provide new evidence regarding life expectancy determinants and how they are related to the income inequality hypothesis. Precisely, it is provided new evidence on this relationship for 26 European countries during the period 1995–2014. The analysis is based on panel data techniques, with the latest data from both Eurostat and the OECD Health Statistics. Furthermore, data from the World Bank is also applied. Besides, we have tested the sensitivity of the estimates in our empirical analysis using three clusters of countries. Our results suggest that income inequality does not significantly reduce health in developed societies, like the European ones. Notwithstanding, as income inequality can be sometimes harmful for population health, these issues must be taken into account in order to improve health care policies.     

Financial Development,Financial Structure,and the Growth Effect of Monetary Policy: International Evidence

This paper investigates how financial development and financial structure affect the growth effect of monetary policy using panel data from 49 countries over the period 1980–2014. We find robust evidence that financial development has a significantly negative impact on the growth effect of monetary policy. We also find that the growth effect of monetary policy tends to be more pronounced as the financial structure of a country becomes more market-based. These results not only add interesting new evidence to the recent literature on the growth effects of monetary policy, but also provide some important insights into the financial determinants of monetary policy effects on economic growth, which have largely been ignored in the previous literature.     

Financial development and top income shares in OECD countries

We examine the causal impact of financial development (FD) on top income shares for a panel of 14 OECD countries—five Anglo‐Saxon countries, eight continental European countries, and Japan—over a 110‐year period. In our main General Method of Moments estimates, we find that a 1‐percentage‐point change in FD increases the top 1% income share by 0.2%. In distribution terms, a 1‐SD incr=ease in FD increases the top 1% income share by around 0.4 of an SD. The effects are robust to various measures of top income shares and FD and alternative estimation techniques, including nonparametric estimation. FD is typically viewed in positive terms in that it makes it easier to access credit and facilitates economic growth. Our results are important because they contribute to understanding of the potential negative effects of FD.     

Explaining the changes of income distribution in China

China has experienced one of the most remarkable increases in inequality over the last decade: the Gini coefficient increasing from 25.7 in 1984 to 37.8 in 1992. Using the recent developments in the theory of income distribution [J. Polit. Econ. 101 (1993) 274; Rev. Econ. Stud. 60 (1993) 35.] and a new panel data set about Chinese provincial-urban-level income inequality, this paper finds that inequality increased with the reduction of the share of state-owned enterprises (SOEs) in GDP, high inflation, growth, and (less significantly) the increasing exposure to foreign trade. We also find some evidence for the Director's Law: income redistribution tends to shift resources from the rich and the poor to the middle class. We do not find schooling and urbanization to be a significant explanatory factor.     

Rethinking the impact of GDP on financial development: Evidence from heterogeneous panels

This paper examines the nonlinear impact of real GDP per capita on financial development in a panel of 125 countries. It also determines the moderating effect of inflation on the impact of GDP on financial development. It employs the dynamic panel system generalized method of moments (GMM) and the dynamic common correlated effects (CCE) to do both panel and country‐specific analysis, as well as control for cross‐sectional dependence, heterogeneity and endogeneity. This study shows that GDP has a positive impact on financial development in the entire panel. However, when we split the panel into different income groups, we find a positive impact in the high‐ and middle‐income groups while the impact is insignificant in the low income group. Although we find no evidence of a nonlinear impact of GDP on financial development in the panel, the country‐specific analysis reveals a significant nonlinear relationship between GDP and financial development in 73 countries. We also show that inflation adversely moderates the positive impact of GDP on financial development in middle‐income countries. This study implies that the relationship between GDP and financial development depends on the levels of GDP and inflation rate. We recommend some policy options based on the findings.     

Economic growth and income inequality in the Asia-Pacific region: A comparative study of China,Japan, South Korea,and the United States

This paper builds an inequality-growth-redistribution nexus, and applies the Engle–Granger two-step ECM approach to estimate the long-run and short-run relationships between inequality and growth for four economies: China, Japan, South Korea, and the United States. Our estimation results support the S-shaped curve hypothesis relating GDP per capita to inequality with different starting points for the four economies. For the reverse relationship, we find a positive causal relationship for China, Japan, and the United States, indicating that increased income inequality spurred economic growth. In addition, we find mixed results on the effect of trade openness on inequality and growth. Trade openness reduced inequality in the United States and Japan, worsened it in China and had no significant effect in South Korea. In the inequality-GDP per capita relationship, exports provided an impetus to economic growth for Japan. As for redistribution, although fiscal redistributive measures reduced inequality in Japan, they played no major role in the other three countries. With regard to the inequality-GDP per capita relationship, all countries except for China show a negative effect of fiscal redistribution on GDP per capita.     

Some Further Evidence on Exchange-Rate Volatility and Exports

The relationship between exchange-rate volatility and aggregate export volumes is examined using a model that includes real export earnings of oil-exporting economies as a determinant of export volumes of a sample of 12 industrial countries. Four fixed-coefficient panel-data estimation techniques, including a generalized method of moments (GMM) and random coefficient (RC) estimation, are employed on panel data covering the estimation period 1977:1–2003:4 using three measures of exchange-rate volatility. Our aim is to provide a theoretically and empirically justifiable specification that can guide researchers. In contrast to recent studies employing panel data, we find little evidence that volatility has a negative and significant impact on trade. We use second-generation RC estimation, which corrects for biases arising from incorrect functional forms, omitted variables, and measurement errors. Our results suggest that the finding of a significant and negative impact of volatility is attributable to specification biases. JEL no. C23, F3, F31     

The Effects of Labor Markets and Income Inequality on Crime: Evidence from Panel Data

We estimate a model of crime using panel data for the U.S. We focus on the role of labor markets, income distribution, and demographics on property crime. We find strong evidence that favorable labor market conditions have a significant negative effect on property crime. We further test this result using sector-specific wages and find that crime is most elastic with respect to wages in sectors that use low-skilled labor. We also find that income inequality has no significant effect on crime and that the proportion of young males in the population has a significant positive effect on crime.     

对外开放扩大还是缩小了中国的工资不平等?——来自中国省级面板数据的证据

对外开放与收入差异的关系一直是国际和国内学术界关注的热点问题,之前大多数研究的结论都认为对外开放扩大了中国的收入差异。本文基于1995～2007年的省份面板数据和行业工资数据,使用Pooled OLS、Fixed Effect、Random Effect、IV、GMM等多种计量方法,发现之前研究的结论———对外开放扩大了收入差异或者减少了贫困,可能是由于忽视了省际间的异质性及其变化所导致的。通过使用动态面板数据的工具变量法解决这一问题之后我们发现,对外开放对中国地区内的工资差距并没有直接的影响。     

收入分配、医疗资源与人口健康:一个跨国研究

收入分配与人口健康的关系是一个争论已久的问题。本文在总结各种理论假说和以往实证研究的基础上,使用新的、质量较好的跨国面板数据,重新检验了收入分配与人口健康的关系。本文的分析重点有二:一是收入分配对人口健康的滞后影响;二是医疗资源在收入分配与人口健康的相关关系中所起的作用。本文的主要发现是,收入不均对人口健康的确有不利影响,但这种不利影响需要10年或更长的滞后期才能充分显现出来,这种滞后性是以往使用固定效应模型的跨国研究未能检测到收入不均与人口健康具有负相关关系的主要原因。此外,医疗资源(特别是初级医疗资源)人均拥有量对人口健康有积极作用;医疗资源有可能通过某种不可观察固定因素对收入分配与人口健康的关系发生影响。这些发现有助于澄清关于收入分配与人口健康关系的争论,对医疗政策也有重要参考价值。     

Is Per Capita Growth in Africa Hampered by Poor Governance and Weak Institutions? An Empirical Study on the ECOWAS Countries

Abstract: This paper proposes an empirical study of the links between poor governance, weak institutions and the growth of per capita income in the countries that belong to the Economic Community of West African States (ECOWAS). We estimate a conditional beta‐convergence model using panel data. We find that variables such as the rule of law, property rights, the regulatory burden, political violence, and government ineffectiveness hinder growth in these countries. An interesting question is then the following: what can the countries do to improve their situations? To answer this question, we give several examples (Ghana, Nigeria and the NEPAD) of measures that are undertaken in order to strengthen the institutions and improve governance.     

Conflict heterogeneity in Africa

The economic development literature widely concurs that conflicts have adverse economic consequences that contribute to poverty, disinvestment and lower human capital leading to widespread inequality and lower economic growth. As such, understanding the nature of conflict has been an important focus for political leaders, policymakers and researchers alike. However, the existing literature does not typically distinguish between the effects of conflict determinants on conflicts by type of actor or aggressor (i.e. state, group and civilian-based). Using panel data analysis for 46 African countries from 1997 to 2017, and a comprehensive geo-referenced Armed Conflict Location and Event Data (ACLED) conflict dataset, we find evidence of variation in the determinants' effects on conflicts by actor types. For the full sample of countries, we find that military expenditure decreases civilian-based conflicts; globalisation increases both state- and civilian-based conflicts while state fragility increases group-based conflicts. On the other hand, income per capita increases all three types of conflicts. At regional level, we find variation in the effects of military expenditure and globalisation on state- and civilian-based conflicts. However, we find little variation in the effects of the determinants on group-based conflicts across the regions. The findings highlight the nuances in conflicts by actor types and their causes which need to be accounted for when formulating conflict resolution policies.     

Does the internet generate economic growth,international trade,or both?

Recent cross country panel data studies find a positive impact of internet use on economic growth and a positive impact of internet use on trade. The present study challenges the first finding by showing that internet use does not explain economic growth directly in a fully specified growth model. In particular openness to international trade variables seem to be highly correlated with internet use and the findings in the literature that internet use causes trade is confirmed here suggesting that internet use impacts trade and that trade impacts economic growth. A simultaneous equations model confirms the positive and significant role of internet use to openness and the importance of openness to economic growth. Internet use shows to be more impacting trade in non-high income countries than in high income countries whereas the impact of trade on economic growth is the same for both income groups.     

Level of Economic Development and Income Inequality: Evidence from the Postwar Developed World

Using a recent high-quality panel dataset on income distribution for 19 developed countries, the postwar relation between the level of economic development and income inequality is estimated in terms of several Kuznets-type specifications. Contrary to what one might expect on the basis of Kuznets's hypothesis, inequality does not decline with an increase in income even at such high levels of development, but shows an uninverted-U pattern that is characterized by an initial decline and a subsequent increase in income inequality. The estimates suggest that the position noted for the postwar United States is shared widely in the developed world.