Skip to main content

LUP Student Papers

LUND UNIVERSITY LIBRARIES

Income Inequality and Economic Growth: An empirical investigation of the European Union 1991–2019

Lagerlöf, Albin LU (2021) NEKH03 20211
Department of Economics
Abstract
This thesis examines the effect of income inequality on economic growth within the European Union (EU) during the period 1991–2019. For the empirical investigation, the analysis includes four measures of income inequality. The data points for these measures have been collected
from the World Income Inequality Database (WIID). The regression procedure is carried out using panel data with fixed effects, including 150 observations from 25 countries in the EU. The results in this thesis find no significant effect of income inequality on economic growth when controlling for a single measure of inequality. However, the results suggest significant effect on the growth rate when the inequality variables are included together. When included... (More)
This thesis examines the effect of income inequality on economic growth within the European Union (EU) during the period 1991–2019. For the empirical investigation, the analysis includes four measures of income inequality. The data points for these measures have been collected
from the World Income Inequality Database (WIID). The regression procedure is carried out using panel data with fixed effects, including 150 observations from 25 countries in the EU. The results in this thesis find no significant effect of income inequality on economic growth when controlling for a single measure of inequality. However, the results suggest significant effect on the growth rate when the inequality variables are included together. When included jointly, income inequality in bottom of the income distribution has significant negative effect on the growth rate. For the same regression procedure, the ratio of the top and bottom decimal of the income distribution has significant positive effect on the growth rate. Implications from these results suggest income inequality should be analysed with complementary measures. This would enable a more comprehensive observation of trends in income inequality as well as its potential effects on economic growth. (Less)
Please use this url to cite or link to this publication:
author
Lagerlöf, Albin LU
supervisor
organization
course
NEKH03 20211
year
type
M2 - Bachelor Degree
subject
keywords
Income inequality, Income distribution, Economic growth, European union, Panel data
language
English
id
9049513
date added to LUP
2021-07-05 13:30:54
date last changed
2021-07-05 13:30:54
@misc{9049513,
  abstract     = {{This thesis examines the effect of income inequality on economic growth within the European Union (EU) during the period 1991–2019. For the empirical investigation, the analysis includes four measures of income inequality. The data points for these measures have been collected
from the World Income Inequality Database (WIID). The regression procedure is carried out using panel data with fixed effects, including 150 observations from 25 countries in the EU. The results in this thesis find no significant effect of income inequality on economic growth when controlling for a single measure of inequality. However, the results suggest significant effect on the growth rate when the inequality variables are included together. When included jointly, income inequality in bottom of the income distribution has significant negative effect on the growth rate. For the same regression procedure, the ratio of the top and bottom decimal of the income distribution has significant positive effect on the growth rate. Implications from these results suggest income inequality should be analysed with complementary measures. This would enable a more comprehensive observation of trends in income inequality as well as its potential effects on economic growth.}},
  author       = {{Lagerlöf, Albin}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Income Inequality and Economic Growth: An empirical investigation of the European Union 1991–2019}},
  year         = {{2021}},
}