Structural Change, Trade, and Inequality: Some Cross-Country Evidence
Roy, Rudra Prosad; Roy, Saikat Sinha | July 2017
Abstract
The process of transition from a low-income to a high-income country involves a structural transformation of the economy along with a change in the distribution of income and wealth in the economy. This study examines how this process of structural change impacts on inequality for a sample of advanced, emerging, and transition economies. Trade liberalization, through a reduction in tariff and removal of nontariff barriers, aids the process of structural transformation and simultaneously changes the income distribution in an economy. This study investigates whether structural change impacts inequality. Using a panel of 217 countries during the period 1991–2014 and the System GMM method of dynamic panel data analysis, it is found that the process of structural change increases income inequality, while trade liberalization and FDI inflows help to reduce it. Income distribution is found to be more equal to infrastructure development. The econometric results are robust and have important policy implications.
Citation
Roy, Rudra Prosad; Roy, Saikat Sinha. 2017. Structural Change, Trade, and Inequality: Some Cross-Country Evidence. © Asian Development Bank Institute. http://hdl.handle.net/11540/7625.Keywords
Development Indicators
Environmental Indicators
Economic Indicators
Educational Indicators
Demographic Indicators
Health Indicators
Disadvantaged Groups
Low Income Groups
Socially Disadvantaged Children
Rural Conditions
Rural Development
Social Conditions
Urban Development
Urban Sociology
Alleviating Poverty
Anti-Poverty
Extreme Poverty
Fight Against Poverty
Global Poverty
Health Aspects Of Poverty
Indicators Of Poverty
Participatory Poverty Assessment
Poverty Eradication
Poverty Analysis
Poverty In Developing Countries
Poverty Reduction Efforts
Urban Poverty
Development projects
Physical infrastructure
Soft infrastructure
Infrastructure finance
Infrastructure bonds
Transport infrastructure
Roads
Highways
Railways
Ports
Airports
Pipelines
Water supply
Power production
Power transmission
Power distribution
Telecommunications
Infrastructure connectivity
Cross border connectivity
Poor
Economic forecasting
Health expectancy
Social groups
Political participation
Distribution of income
Inequality of income
Developing countries
Rural community development
Mass society
Social change
Social policy
Social stability
Population
Sustainable development
Peasantry
Urban policy
Urban renewal
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