An Analysis of Convergence of Income Inequality in Developed and Developing Countries

Authors : Hatice Akdağ, Mustafa Özer

Pages : 19-31

Doi:10.19168/jyasar.757287

View : 16 | Download : 10

Publication Date : 2021-01-31

Article Type : Research

Abstract :Even though income inequality one of the most commonly analyzed topics in economics, there are few studies aiming to examine the convergence in income inequality. By using a balanced panel of 98 countries over the period of 1995 and 2015, we provide empirical evidences of the beta convergence that explains why there is a decrease in inequality levels in countries that have high inequality levels at the start of the study period and an increase in inequality levels for countries that have low inequality levels at the first year of the sample period. The results of the study support the convergence hypothesis in inequality and provide some explanation of the reasons and the tendencies of income inequalities in countries. Thus, it is possible to derive important implications from the results of the study which contributes the convergence/divergence debate.
Keywords : income inequality, beta convergence, panel data methods