Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/289584 
Year of Publication: 
2024
Series/Report no.: 
GLO Discussion Paper No. 1417
Publisher: 
Global Labor Organization (GLO), Essen
Abstract: 
Although it is often argued that wealth inequality matters more for economic growth than income inequality, this relationship has rarely been studied empirically, with a few exceptions covering a very restricted country sample or short timeframe. Leveraging hitherto unexploited wealth inequality data from the World Inequality Database, covering a panel of 165 countries between 1995 and 2019, we document a negative and statistically significant relationship between wealth concentration at the top of the distribution and economic growth. A one standard deviation increase in wealth inequality within countries is associated with a 0.4 percentage points (17%) decline in growth rates. Instrumental variables support a causal interpretation of the results. The results survive a large battery of robustness checks, and we find little evidence to suggest a heterogeneous relationship.
Subjects: 
Wealth Inequality
Economic Growth
Economic Development
JEL: 
D31
D63
O10
O47
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.