Income inequality and financial reform in Asia: the role of human capital |
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| Authors: | Jie Li Han Yu |
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| Affiliation: | 1. Chinese Academy of Finance and Development, Central University of Finance and Economics, Haidian, Beijing, 100081, Chinajieli.cn@gmail.com;3. Department of Economics, Louisiana State University, Louisiana, Baton Rouge, LA 70803, USA |
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| Abstract: | We investigate whether financial reform can reduce income inequality in Asia, with particular emphasis on the role of human capital. Extending Galor and Zeira (1993), we demonstrate that financial reform is effective in reducing income inequality, and the effect is more profound in a country with higher human capital. Using the data for 18 countries in Asia, the region with the most promising financial reform, we confirm our theoretical finding. In addition, among disaggregated financial reforms, lift of credit control, better banking supervision and security market development seem to be significantly associated with reduction of income inequality. |
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| Keywords: | financial reform income inequality human capital Asia |
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