Do Rising Top Incomes Spur Economic Growth? Evidence From OECD Countries Based on a Novel Identification Strategy

Herwartz, Helmut; Walle, Yabibal M.

doi:10.1111/roiw.12399

Cited by 6 publications

(3 citation statements)

References 46 publications

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“…However, there are instances where the relationship between economic growth and wage levels may be reversed. For example, economic growth may lead to higher wages at the top level but not at the middle level (Herwartz & Walle et al, 2020).…”

Section: Employment Level and Povertymentioning

confidence: 99%

Impact of Gwadar Deep Seaport Development under CPEC on Poverty Alleviation in Gwadar City

Farooq

2024

SSMR

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The purpose of this study is to investigate the impact of the deep seaport development project under the China-Pakistan Economic Corridor (CPEC) on poverty alleviation in Gwadar city. A review of past research highlights the feasibility of similar projects that have been initiated in other countries and their positive outcomes for regional economies. Previous literature indicates that port development projects enhance local economic growth and help reduce poverty in the region. This study uses three key indicators to measure poverty: education level, health facilities, and living standards. The statistical analysis reveals that improvements in these three indicators have led to a decrease in poverty levels in the region. Under CPEC, various development projects have been launched across the country. However, several issues can limit the benefits of these projects, such as political interference, pressure from vested interest groups, and adverse effects on the natural environment. The study recommends that improving regional connectivity and fostering social interaction among inhabitants are crucial for maximizing the benefits of these development projects and effectively alleviating poverty.

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Section: Employment Level and Povertymentioning

confidence: 99%

Impact of Gwadar Deep Seaport Development under CPEC on Poverty Alleviation in Gwadar City

Farooq

2024

SSMR

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“…Furthermore, Litschig and Lombardi (2019) present evidence that, in terms of the subsequent growth effects, it matters whether inequality or redistribution originates from the lower or upper tails of the distribution. Specifically, regarding top income, Herwartz and Walle (2020) have showed that an increase in the share of income that goes to the top 1 percent is related to higher economic activity. Focusing on 12 OECD economies in the post-1950 period, the main transmission channel lies in the prevailing structure of incentives.…”

Section: An Overview Of the Related Literaturementioning

confidence: 99%

The Kuznets curve of the rich

Dávila‐Fernández

Punzo

2021

Economic Systems

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“…The second group touches upon the opposite direction of the causality from inequality to growth (e.g., Persson and Tabellini (1994) and Alesina and Rodrik (1994), etc. ), as well as more recent variations on top income shares (Herwartz & Walle, 2020) and redistribution (El‐Shagi & Shao, 2019). The third group identifies determinants of economic growth or inequality (e.g., Barro (2000), etc.…”

Section: Introductionmentioning

confidence: 99%

Decoupling of functional and household income distribution by economic growth: new findings from analysing the three‐way growth‐equity nexus

Lee,

Lee

2024

J of Intl Development

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This study analyses the three‐way relationship between economic growth and the two aspects of income distribution, namely, functional income distribution (labour income share) and household income distribution (Gini coefficient). One contribution of such three‐way analysis is to reveal the ‘decoupling’ pattern of the growth‐equity nexus, namely decoupling between functional income distribution and household income distribution, as it finds that economic growth tends to increase labour income share but worsen household income inequality, and also to confirm the reverse relationship that that higher labour income shares and household income inequality lead to a higher rate of economic growth. We show that these findings co‐exist with the traditional belief in the literature about the directly reinforcing relationship between functional and household income distribution. These findings are consistent with skilled labour compensated by performance‐based higher wages, which is often associated with a skill‐biassed technological change. The study confirms the same three‐way relationship in both developed and developing countries, but with several different determinants and different trends in the key variables. Given this nuanced trade‐off between economic growth and household income equality, coupled with no such trade‐off between growth and labour income share, a sensible policy prescription may be a combination of growth‐enhancing policy of increasing pre‐tax labour income share and a separate redistribution policy to decrease disposable household income inequality, which can mitigate income inequality without harming economic growth.

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Do Rising Top Incomes Spur Economic Growth? Evidence From OECD Countries Based on a Novel Identification Strategy

Cited by 6 publications

References 46 publications

Impact of Gwadar Deep Seaport Development under CPEC on Poverty Alleviation in Gwadar City

Impact of Gwadar Deep Seaport Development under CPEC on Poverty Alleviation in Gwadar City

The Kuznets curve of the rich

Decoupling of functional and household income distribution by economic growth: new findings from analysing the three‐way growth‐equity nexus

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