Intelligence Inequality and Income Inequality

Inequality of income is one of the significant factors forming social capital. Two views dominate among economists dealing with the influence of income inequality on economic growth. On the one hand, a too low level of income inequality does not motivate people to increase their labour productivity. Low inequality of income might result from an extended social care system and a GDP burdened with social transfers. A good example may be a situation when an unemployed person refuses to accept a job offer and prefers unemployment benefits to a slightly higher salary. Moreover, a lack of incentives for an employee who fails to acknowledge the economic sense of increasing the productivity of his or her work might lead to a slower growth of the economy.
 On the other hand, a contrary view suggests that an increase in inequality of income has a negative impact on the economy. The accumulation of wealth by a small number of citizens raises doubts about the good use of that wealth for the investments necessary for the growth of the economy. Excessive inequality of income is confronted with the disapproval of a significant part of society and is regarded as unfair and unjustified. It may also increase the crime rate, decrease trust and, more generally, lead to the weakening of social capital.
 The arguments presented above lead to the hypothesis that the influence of income inequality on the growth of the economy has a non-linear, parabolic character.
 We have confirmed this hypothesis in growth models of the US and Swedish economies. We assess the historically optimal inequality of income measured by the Gini coefficient at 46% and 24% for the US and Sweden, respectively. The optimal inequality of income for Poland was assessed previously at 29%. The dissimilarities may result from differences in culture, society, educational level and diligence.

Income inequality is a more complex problem than poverty. The existence of income inequality will hamper the process of economic development and disrupt people's welfare. This study aims to determine the effect of the tourism sector on income inequality in the Regency / City of Central Java Province using the variables of the number of tourists, the number of tourism workers, economic growth, and Human Development Index (HD). This study uses Quantile Panel Regression using time series data 2015-2022 and cross-section data of 35 regencies/cities in Central Java Province. Based on the results of the research, it can be seen that the number of tourists has a positive and significant effect on middle income inequality, but has no effect on low and high income inequality, tourism labour has a negative and significant effect on low income inequality, but has no effect on middle and high income inequality, economic growth has a positive and significant effect on low income inequality, but has no effect on middle and high income inequality, HDI has a negative and significant effect on low income inequality and positive on high income inequality, but HDI has no effect on middle income inequality

This chapter calls for understanding the perspective of multinational enterprises (MNEs) on international differences in income inequality. The authors set a research agenda on how national differences in income inequality influence MNE expansion strategies. Applying a transaction cost framework, both negative and positive economic outcomes of income inequality, from the MNE's perspective, are identified. Low levels of income inequality may deter foreign investment, as MNEs prefer countries where they incur lower levels of transaction costs arising from interactions with various market and non-market actors. However, the positive effect of income inequality on location attractiveness will likely diminish at higher levels of inequality when benefits are increasingly offset by additional monitoring, bargaining and security costs owing to instability and conflict. The chapter further explores the implications for level of MNE equity applied in the choice of entry mode under different levels of income inequality.

This analysis examines the relationship between nonrenewable resource dependence, economic growth and income inequality. It uses a two-equation system in which the Gini index and GDP per capita are the dependent variables and the stock of nonrenewable resources as a share of national wealth -- i.e. resource dependence -- is the independent variable. Using a dataset that includes information on 43 countries from 1980 to 2012, this paper estimates several model specifications in order to check the robustness of the results under different assumptions and to account for income-group-related heterogeneity among countries. The baseline model provides strong evidence that natural resource dependence is negatively correlated with both per capita GDP and the Gini index; in other words, resource dependence is associated with lower income levels, but also with a more equal distribution of income. Interestingly, however, after controlling for country income group, the sign and magnitude of these relationships appear to become dependent on national-level structural characteristics. Among higher-income countries, greater nonrenewable natural resource dependence is associated with lower income inequality, while there is no statistically significant correlation with GDP per capita. Among the lower-income group, greater dependence on nonrenewable natural resources is associated with both higher levels of income inequality and lower per capita GDP. Further analysis focusing on a subsample of non-renewable resource rich countries confirms these findings.

Income inequality affects substantive outcomes such as redistribution and voter turnout. Nevertheless, a country’s level of income inequality has a differential impact on citizens’ evaluation of the same because individuals have different normative values about inequality. This paper shifts the analytical focus from objective income inequality—commonly measured by the Gini ratio—to subjective dimensions of income inequality, namely individual tolerance for income inequality. Using the Philippines as a case, this paper argues that a country’s level of objective income inequality does not systematically affect a person’s level of tolerance for income inequality. This argument is counter-intuitive because most extant studies implicitly assume that a country’s level of income inequality affects a person’s values on the same. By focusing on a person’s redistributive preference, this paper also shows that subjective dimensions of income inequality can affect substantive outcomes.

Quantitative Aspects of the Economic Growth of Nations: VIII. Distribution of Income by Size

We combine household survey micro data, tax data, and national accounts to construct annual pretax income inequality series for South Korea, which is coherent with macro aggregates. We provide the distribution of pretax national income over the time period from 1933 to 2022, with detailed breakdown by income composition in the years from 1996 to 2022. Our new series demonstrates that Korean top income shares decreased substantially from the 1930s up until the mid-1960s, following various wars, independence and land reform policies. Income inequalities then stabilized against the backdrop of rapid economic growth in the 1970s and 1980s, and decreased even further from the late 1980s onwards until the onset of the Asian Financial Crisis in 1997, which contradicts the “Kuznets Curve.” In the aftermath of the crisis, income inequality worsened due to the rise of tax-exempted capital income concentration at the top. Compared to other East Asian countries, South Korea exhibits relatively lower levels of income inequality in terms of higher bottom 50% income shares, mostly due to a more equal distribution of national income growth at the stages of economic take-off in the 1980s, even though income concentration at the very top has strikingly worsened over the last two decades, with its top 1% income shares in 2022 returning back to the peak only observed during the colonial era. (Stone Center on Socio-Economic Inequality Working Paper)

The problem of income inequality is globally relevant, receiving the attention of both scientists and pol- iticians. Lithuania as a small country has made significant progress in approaching the standard of liv- ing in Western Europe. However, there are still differences in economic growth between separate popula- tion groups. Thus, the problem of income inequality remains very acute. Currently, researchers are widely discussing the risk of income inequality to the country’s society by analysing its causes and proposing var- ious solutions. Although scientific debates address income inequality across regions, such studies are often limited to examples of large countries. Meanwhile, there is a lack of studies on regional income inequality in small countries, so the question of whether a small country is characterised by regional income inequal- ity remains open. This research aims to examine the level of regional income inequality in Lithuania. We hy- pothesised that Lithuania has a high level of regional income inequality and this is one of the causes of the high income inequality in the whole country. To estimate regional income inequality, we used the most com- mon measures: Gini coefficient, decile ratio, and the coefficient of variation. The analysis was performed at level 3 of the Nomenclature of Territorial Units for Statistics (NUTS), according to which Lithuania is divided into 10 administrative counties. For this research, we chose the indicators illustrating income per capita on various levels, i.e., gross domestic product (GDP) per capita, average disposable household income per cap- ita, and gross hourly wages, as the various types of income can be used. For the estimation of GDP per cap- ita and average disposable household income, we analysed the data provided by the Lithuanian Department of Statistics (Statistics Lithuania) for 2014–2017. Due to a lack of data to estimate gross hourly wages, we examined the statistical data from the Lithuanian Department of Statistics for 2014. The results show that the hypothesis has not been confirmed. According to the research results, there is a small distribution of in- come between different regions of a small economy, although the level of economic development of different regions differs. The study findings are important not only from an academic perspective for identifying the causes of income inequality and raising questions for further research, but also for regional economic policy makers. The obtained results show that decisions related to a more equal distribution of income in Lithuania as a small country are determined not only by the specificity of its regions but also by the general trends of the country.

Correlation or causation? Income inequality and infant mortality in fixed effects models in the period 1960–2008 in 34 OECD countries

INTRODUCTION: Equitable healthcare distribution is essential, yet socioeconomic disparities often impact the availability of specialty medical services. This study examines how income inequality affects neurosurgeon distribution in U.S. counties. METHODS: We utilized the 2021 CDC Interactive Atlas of Heart Disease and Stroke to gather data on the distribution of neurosurgeons across U.S. counties. Additionally, demographic and socioeconomic data for each county were obtained from the U.S. Census Bureau county profiles. Income inequality was calculated using the Gini index. RESULTS: Among 437 U.S. counties with at least one practicing neurosurgeon, 72 exhibited a Gini index above the national average, reflecting higher income inequality. These counties had a significantly higher proportion of non-Hispanic Black (18.29% vs. 7.99%, P<0.001) and Hispanic residents (21.37% vs. 13.22%, P<0.001) compared to counties with lower income inequality. Additionally, these high inequality counties also reported higher poverty rates (15.76% vs. 11.64%, P<0.001) and a greater percentage of residents without health insurance (10.80% vs. 9.22%, P=0.007). Furthermore, these areas had fewer healthcare facilities; on average, there were fewer hospitals (2.66 vs. 5.54, P<0.001) and fewer hospitals providing specialized neurological services (1.58 vs. 3.58, P<0.001). The analysis underscored a significant disparity in the availability of neurosurgeons in high income inequality counties, with these regions being three times more likely to be underrepresented by neurosurgeons (OR 3.49, 95%CI 1.68-7.25, P<0.001). This relationship persisted even after adjusting for various demographic and socioeconomic factors. CONCLUSIONS: The study underscores significant disparities in neurosurgeon distribution linked to income inequality, with higher inequality associated with fewer healthcare resources and greater demographic challenges. Enhanced policy measures are needed to improve healthcare access and infrastructure in underserved areas.

Support for democracy in cross-national perspective: The detrimental effect of economic inequality

Income inequality and child maltreatment risk during economic recession

The relationship between income inequality and health remains controversial in terms of whether or not it exists and, if so, its extent and the mechanisms involved. This study examines the relationship between income inequality, as indicated by the Gini coefficient, and mortality in Italy. Cross-sectional ecological study on the 57,138,489 inhabitants living in the 95 provinces existing in Italy in 1994. Multivariate weighted regression analysis of total and age-specific mortality, income inequality, gender, and interaction between income inequality and median income or geographical area. A positive association between income inequality and total mortality was observed for both genders in provinces with a low per capita income and in Southern and Central Italy. The effect was present for infants and for persons over 24 years of age; it was marked for the elderly, particularly women. A negative association with mortality was observed for males living in the North-west. Interactions between income inequality and median income, and between income inequality and geographical area were found. In Italy, the relationship between income inequality and health is mixed and not universal, in so far as a positive association was observed only in provinces with lower absolute income. Elderly persons living in Southern Italy represent the population subgroup most vulnerable to unequal income distribution. Income inequality can, in part, explain the historically higher mortality among women in Southern Italy compared to women in the North. These results indicate that income inequality affects the health of population subgroups differentially.

Ohtake (2008) has three important conclusions. First, income inequality in Japan has increased. Second, the income gap has been greater in the USA than in Japan. Third, in contrast to Japanese society, Americans are comparatively more tolerant of their widening income gap caused by academic background and inborn talent, and also believe that their society has given them an equal opportunity to become rich. Income inequalities are rising in many advanced capitalist democracies, including Japan. This has sparked debate on their causes and on the capacity of welfare states and social policies to counter market inequities. Postwar Japan has been known to have a fairly egalitarian income distribution, underpinned by lifetime employment, a seniority-based wage system, and corporate welfare. The role of the state is more circumscribed than in many Western capitalist economies, and this has limited the growth of government spending and the tax burden. However, income inequality has also been rising in Japan. According to the Organisation for Economic Cooperation and Development (OECD, 2006, chapter 4), the Gini and the ratio between the top and bottom of disposable income have risen above the OECD average. The main reasons for rising income inequality in Japan are identified as population aging and the growing phenomenon of labor market dualism (“freeters” in Ohtake, 2008). A significant increase in Japanese inequality during the 1980s was due to the aging population. How the aging population affects income distribution needs a clearer explanation in Ohtake (2008). The OECD (2006) identified three channels. First, the rising percentage of the elderly population raised the overall level of inequality because of larger between-group income differences. Second, inequality among those over age 65 is higher than for those below age 65. Third, an increasing proportion of the elderly are living on their own, thus increasing the number of households with older persons reporting low incomes. Social expenditures in Japan are focused largely on the elderly, mainly insurance systems for pensions, health care, and long-term nursing care. With Japan aging rapidly, Ohtake could explore the various policy options facing the Japanese government. Ohtake notes that income inequality especially increased within the age groups below age 39, due to the rapid growth of “freeters” (nonregular workers). The OECD (2006) noted that the proportion of nonregular workers has risen from 19% of employees in 1994 to 29% in 2004. These include young people on temporary contracts, married women working part-time, and older persons who are rehired on fixed-term contracts. One quarter of employees in the 20–24 age group and over half of women employees are nonregular workers, and they are most prevalent in the service sector and in smaller firms. These nonregular workers are paid lower wages. They rose rapidly in the 1990s following an easing of government restrictions on temporary employment. Many of these workers are not included in enterprise-based social insurance schemes. In a country where lifelong employment acted as a social safety net covering everything from health care, housing loans to retirement funds, the social impact has been devastating. Although introduced during the recession years, labor market dualism could become entrenched even with economic recovery. Ohtake notes that since nonregular workers are likely to earn much less over the course of their lifetimes, they will contribute to a widening income gap in the future. Ohtake could explore possible solutions to rising inequality caused by this labor market dualism. There is a growing debate in advanced capitalist democracies on what factors shape societal attitudes and values toward support for government redistributive policies, and how these attitudes vary across countries according to level of economic development or income inequality. For example, do countries with higher levels of income inequality also have higher support for redistribution policies? Are those with higher education, higher incomes, or greater job security less likely to support redistribution policies? Are those more vulnerable groups and most likely to benefit from welfare programs more likely to support redistribution policies? Ohtake highlights interesting differences between Japan and the USA in levels of awareness about the income gap and attitudes toward the different determinants of income inequality. Although the rise in income inequality is less in Japan than in the USA, there appears to be a greater awareness and concern over the phenomenon in Japan, and a greater acceptance of income redistribution through taxation and social security policy. This reflects the fact that an equal income distribution is far more strongly supported in Japan than in any other OECD country. Also, there has been a growing unease caused by the “freeters” phenomenon and the growing adoption of a performance-based wage system. Hence, the Japanese appear to prefer income inequality arising from choice/effort and are averse to income inequality arising from inborn talent, academic background, and luck. The Japanese traditional wage system was based mainly on “evaluating the length of an employee's overtime work and his effort.”“Academic background” in the Japanese perception survey is taken to mean “the old school tie network” rather than academic qualifications and considered an undesirable income determinant. What is not highlighted in Ohtake's paper are two possible departures from the Japanese preference for traditional “choice/effort.” They refer to the growing numbers of young Japanese university graduates and women who are employed by foreign firms in Japan in recent years and who have benefited from the departure from the traditional wage system.

Objective To provide quantitative evaluations on the association between income inequality and health.Design Random effects meta-analyses, calculating the overall relative risk for subsequent mortality among prospective cohort studies and the...