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Income Inequality, Urban Size and Economic Growth in OECD Regions

Author

Listed:
  • Vicente Royuela

    (University of Barcelona)

  • Paolo Veneri

    (OECD)

  • Raul Ramos

    (University of Barcelona)

Abstract

The purpose of this paper is to understand how income inequality is associated with economic growth in OECD regions and whether the degree and type of urban concentration affects this relationship. Both income inequality and urban concentration can be seen as patterns of resource allocation that are particularly interlinked at the regional level. We combine household survey data and macroeconomic databases, covering a period ranging from 2004 to 2012 for comparable regions in 15 OECD countries. Econometric results show that, at least for the short period under consideration, there is a general negative association between inequalities and economic growth, especially since the start of the economic crisis. This relationship is sensitive to the type of urban structure. Higher inequalities seem to be more detrimental for growth in large cities, while regions characterised by small cities and rural areas are less affected.

Suggested Citation

  • Vicente Royuela & Paolo Veneri & Raul Ramos, 2014. "Income Inequality, Urban Size and Economic Growth in OECD Regions," OECD Regional Development Working Papers 2014/10, OECD Publishing.
    • Handle: RePEc:oec:govaab:2014/10-en
    DOI: 10.1787/5jxrcmg88l8r-en
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    Citations

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    Cited by:

    1. Fidrmuc, Jarko & Gundacker, Lidwina, 2017. "Income inequality and oligarchs in Russian regions: A note," European Journal of Political Economy, Elsevier, vol. 50(C), pages 196-207.
    2. Iván González Gordón & Budy P. Resosudarmo, 2019. "A sectoral growth‐income inequality nexus in Indonesia," Regional Science Policy & Practice, Wiley Blackwell, vol. 11(1), pages 123-139, March.
    3. Clémentine Cottineau & Olivier Finance & Erez Hatna & Elsa Arcaute & Michael Batty, 2019. "Defining urban clusters to detect agglomeration economies," Environment and Planning B, , vol. 46(9), pages 1611-1626, November.
    4. Kuo-Hsing Kuo & Cheng-Te Lee, 2017. "Economic Integration, Growth and Income Distribution," Australian Economic Papers, Wiley Blackwell, vol. 56(1), pages 59-71, March.
    5. Luis Ayala & Javier Martín-Román & Juan Vicente, 2023. "What Contributes to Rising Inequality in Large Cities?," LIS Working papers 850, LIS Cross-National Data Center in Luxembourg.
    6. Milan Bouchet-Valat, 2018. "Educational and socioeconomic homogamy, development level, and metropolisation across 149 European regions," Working Papers 1, French Institute for Demographic Studies.
    7. Anand Sahasranaman & Nishanth Kumar & Luis M. A. Bettencourt, 2024. "Urbanization, economic development, and income distribution dynamics in India," Papers 2410.04737, arXiv.org.
    8. Łukasz Piętak, 2022. "Regional disparities, transmission channels and country's economic growth," Journal of Regional Science, Wiley Blackwell, vol. 62(1), pages 270-306, January.
    9. Zbigniew Mogila & Patricia C. Melo & José M. Gaspar, 2020. "Exploring the relation between income mobility and inequality at the regional level using EU-SILC microdata," Working Papers REM 2020/0134, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.

    More about this item

    Keywords

    economic growth; inequality; OECD regions; urban;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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