Finance and Income Inequality : Test of Alternative Theories

Clarke, George ; Xu, Lixin Colin ; Zou, Heng-fu

World Bank, Washington, DC

关键词: FINANCIAL SECTOR REFORM;    INCOME INEQUALITIES;    FINANCIAL INTERMEDIATION;    GINI COEFFICIENT AGGREGATE INCOME;    AGRICULTURE;   

DOI  :  10.1596/1813-9450-2984
RP-ID  :  WPS2984

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Although theoretical models makedistinct predictions about the relationship betweenfinancial sector development and income inequality, littleempirical research has been conducted to compare theirrelative explanatory power. The authors examine the relationbetween financial intermediary development and incomeinequality in a panel data set of 91 countries for theperiod 1960-95. Their results provide evidence thatinequality decreases as economies develop their financialintermediaries, consistent with the theoretical models inGalor and Zeira (1993) and Banerjee and Newman (1993).Moreover, consistent with the insight of Kuznets, therelation between the Gini coefficient and financialintermediary development appears to depend on the sectoralstructure of the economy: a larger modern sector isassociated with a smaller drop in the Gini coefficient forthe same level of financial intermediary development. Butthere is no evidence of an inverted-U-shaped relationbetween financial sector development and income inequality,as suggested by Greenwood and Jovanovic (1990). The resultsare robust to controlling for biases introduced by simultaneity.