Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Exploring the Existence of a Short-Run Kuznets Curve: Does the Fourth Industrial Revolution Affect Income distribution?

Exploring the Existence of a Short-Run Kuznets Curve: Does the Fourth Industrial Revolution... AbstractThe link between technological change and income inequality is central to the Kuznets hypothesis. In a time of technological transition towards the digitization and intelligentization of manufacturing processes (the fourth industrial revolution), this paper investigates the relationship between economic development and income distribution through the implementation of both a system generalized method of moments (system-GMM) and a semiparametric fixed effects model approach. Based on a panel of 31 European-area countries over a period of 12 years (2007–2018), accounting for the endogeneity bias arising from the transitional dynamics of income inequality and per capita income, our main results confirm the existence of an inverted U-shaped relationship between income inequality and economic development. Moreover, our analysis shows that the change in the share of labour employed in high-tech sectors is the main driver of this evolutionary pattern. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The B E Journal of Economic Analysis & Policy de Gruyter

Exploring the Existence of a Short-Run Kuznets Curve: Does the Fourth Industrial Revolution Affect Income distribution?

Loading next page...
 
/lp/de-gruyter/exploring-the-existence-of-a-short-run-kuznets-curve-does-the-fourth-DNsuaWOXUL

References (12)

Publisher
de Gruyter
Copyright
© 2023 Walter de Gruyter GmbH, Berlin/Boston
ISSN
1935-1682
eISSN
1935-1682
DOI
10.1515/bejeap-2020-0231
Publisher site
See Article on Publisher Site

Abstract

AbstractThe link between technological change and income inequality is central to the Kuznets hypothesis. In a time of technological transition towards the digitization and intelligentization of manufacturing processes (the fourth industrial revolution), this paper investigates the relationship between economic development and income distribution through the implementation of both a system generalized method of moments (system-GMM) and a semiparametric fixed effects model approach. Based on a panel of 31 European-area countries over a period of 12 years (2007–2018), accounting for the endogeneity bias arising from the transitional dynamics of income inequality and per capita income, our main results confirm the existence of an inverted U-shaped relationship between income inequality and economic development. Moreover, our analysis shows that the change in the share of labour employed in high-tech sectors is the main driver of this evolutionary pattern.

Journal

The B E Journal of Economic Analysis & Policyde Gruyter

Published: Apr 1, 2023

Keywords: income distribution; technological shocks; Kuznets curve; GMM; O15; O33; O52

There are no references for this article.