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Title: The Effect of Inequality on (Human) Development – Insights from a Panel Analysis of the Human Development Index
Author: Thiel, Fabian
Director: Royuela Mora, Vicente
Castells-Quintana, David
Keywords: Creixement econòmic
Recursos humans
Economia de mercat
Tesis de màster
Economic growth
Human capital
Market economy
Masters theses
Issue Date: Jun-2016
Abstract: In this paper we connect two of the main and current lines of research in the development and economic growth literature: The analysis of the effect and transmission channels of inequality on economic growth and the discussion about the necessity for a broader development and prosperity measure. We estimate the effect of net income inequality on the Human Develop-ment Index and its components in a panel of 117 countries over the period of 1970 to 2010. In doing so, we find evidence for (1) a negative long-run effect and (2) different short-run im-pacts of inequality on the different dimensions of development: A positive short-run effect on economic development, but a negative one on education outcomes, hinting at particular transmission channels. In addition, we detect (3) that those effects can be even more pro-nounced with low levels of development, reconciling seemingly conflicting previous findings in the literature. Moreover, (4) we find some evidence suggesting that the impact of inequality on human development is negatively dependent on the prevailing level of inequality. Finally, we highlight and discuss some interesting directions for future and subsequent research based on our work.
Note: Treballs Finals del Màster d'Economia, Facultat d'Economia i Empresa, Universitat de Barcelona, Curs: 2015-2016, Tutors: Vicente Royuela ; David Castells-Quintana
Appears in Collections:Màster Oficial - Economia

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