Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/179219
Authors: 
Roy, Rudra Prosad
Roy, Saikat Sinha
Year of Publication: 
2017
Series/Report no.: 
ADBI Working Paper No. 763
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.
Subjects: 
inequality
growth and structural change
trade
System GMM
JEL: 
D63
F1
O18
O40
C23
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-nd/3.0/igo/
Document Type: 
Working Paper

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