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Resource boom and inequality: Kazakhstan as a case study

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  • Howie, Peter
  • Atakhanova, Zauresh

Abstract

Our research investigates the impact of a major resource boom on income inequality within Kazakhstan's regions using household-level data across the entire income distribution and within the top and bottom halves of the income distribution. In addition, we evaluate the inequality dynamics separately in urban and rural areas. The theoretical foundation shows that a resource boom will decrease income inequality through the labor market if the non-traded sector is relatively intensive in its use of unskilled labor. Government transfers financed by resource income can further reduce inequality. Our regression analysis indicates that resource booms lower inequality when we control for the effect of changing labor income, institutional quality, education levels, and public health care spending. In addition, quality of institutions is an important equalizing factor for the lower income households in urban areas, but not in rural areas. Public health programs decrease overall inequality in the rural areas; however, they do not affect the bottom half of the income distribution.

Suggested Citation

  • Howie, Peter & Atakhanova, Zauresh, 2014. "Resource boom and inequality: Kazakhstan as a case study," Resources Policy, Elsevier, vol. 39(C), pages 71-79.
    • Handle: RePEc:eee:jrpoli:v:39:y:2014:i:c:p:71-79
    DOI: 10.1016/j.resourpol.2013.11.004
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    More about this item

    Keywords

    Resource curse; Inequality; Panel-data analysis;
    All these keywords.

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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