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Article: A REASSESSMENT OF THE RELATIONSHIP BETWEEN INCOME INEQUALITY AND POVERTY
- Article from:
- Journal of Economics and Economic Education Research
- Article date:
- May 1, 2006
- Author:
CopyrightCopyright The DreamCatchers Group, LLC 2006. Provided by ProQuest LLC. (Hide copyright information)
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ABSTRACT
The paper challenges the belief that income inequality causes poverty. The state data set instead of international database is used to investigate whether or not a rise in income equality causes an increase or decrease in poverty rate. The methodology suggested by Learner (1983) and Levine et al (1991) is used to test the robustness of income inequality coefficient estimates by specifying and altering a set of other conditioning variables which explain poverty. The study finds support for the hypothesis that income inequality may cause economic growth and hence reduce poverty.
INTRODUCTION
One of the goals of the American economic system is equity. Indeed, if there is one area in ...