Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/51811 
Year of Publication: 
2011
Series/Report no.: 
IZA Discussion Papers No. 5486
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
We analyze the association between inequality and growth across 72 labor market regions in Sweden 1990-2006. Highly accurate measures of growth and inequality (gini, Q3, p9075, p5010) are derived from population register data. The regional set-up also reduces problems with omitted variable bias and endogeneity found in cross country comparisons since the regions within a country share the same redistributive policies and institutions. The findings suggest that inequality between the 90th and 75th percentiles enhances regional growth. This result no longer holds when we take into account changes in commuting patterns. Although only suggestive, the finding is interesting in that it is consistent with the hypothesis that inequality enhances growth by stimulating commuting incentives.
Subjects: 
growth
income distribution
inequality
gini
JEL: 
O4
D3
J6
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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