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Distribution and growth: cross-country evidence

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An endogenous growth model is presented to examine the determinants of economic growth and income distribution and their relationship. Three major findings from a cross-country analysis of 45 countries are: (1) a higher level of educational attainment of the labour force has an equalizing effect on income distribution, while the larger the dispersion of schooling among the labour force, the greater the income inequality; (2) human capital investment as well as physical capital investment are significant factors contributing to economic growth; and (3) income inequality has a negative effect on economic growth, supporting the existence of a complementary relationship between equity and growth.

Document Type: Research Article


Publication date: 1998-07-01

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