Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/126289
Authors: 
Tuominen, Elina
Year of Publication: 
2015
Series/Report no.: 
WIDER Working Paper 2015/036
Abstract: 
This paper uses recently published top 1% income share series in studying the inequality-development association. The top income shares data are of high quality and cover about a century for some countries and thus provide an interesting opportunity to study slow development processes. The empirical inequality-development studies have started to call into question the use of parametric (quadratic) specifications. To address the issue of functional form, this study exploits penalized spline methods. The association between top 1% share and development is found to experience a reversal at later stages of development and, thus, a positive link is observed in many advanced economies. Although this study is not taking a strong stand on causality, additional analysis in this paper advocates that more than sectoral shifts are needed to explain distributional changes.
Subjects: 
inequality
top incomes
development
nonlinearity
longitudinal data
JEL: 
N30
O11
O15
ISBN: 
978-92-9230-921-3
Document Type: 
Working Paper

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