Abstract
The link between technological change and income inequality is central to the Kuznets hypothesis. In a time of technological transition towards the digitization and intelligentization of manufacturing processes (the fourth industrial revolution), this paper investigates the relationship between economic development and income distribution through the implementation of both a system generalized method of moments (system-GMM) and a semiparametric fixed effects model approach. Based on a panel of 31 European-area countries over a period of 12 years (2007–2018), accounting for the endogeneity bias arising from the transitional dynamics of income inequality and per capita income, our main results confirm the existence of an inverted U-shaped relationship between income inequality and economic development. Moreover, our analysis shows that the change in the share of labour employed in high-tech sectors is the main driver of this evolutionary pattern.
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Supplementary Material
This article contains supplementary material (https://doi.org/10.1515/bejeap-2020-0231).
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Articles in the same Issue
- Frontmatter
- Research Articles
- Overconfidence and Public Intoxication Arrest: Evidence from a University Town Police Log
- The Changing Determinants of Juvenile Crime
- Failing Young and Temporary Workers? The Impact of a Disruptive Crisis on a Dual Labour Market
- Productivity, Innovation Spillovers, and Mergers: Evidence from a Panel of U.S. Firms
- Trade Policies and FDI with an Endogenous Market Structure
- Is There a Business Cycle Effect on the Incidence of Dual Job Holding?
- The Impact of Environmental Taxation on Wage Inequality in the Presence of Subsidizing Renewable Energy
- The Competitive Foundations of Price Cap Regulation
- Letters
- Exploring the Existence of a Short-Run Kuznets Curve: Does the Fourth Industrial Revolution Affect Income distribution?
- MRS Functions and the Pareto Interval in Public Good Provision
- Optimal Imprisonment with General Enforcement of Law
- Immigration and Perceived Social Position. Insights from an Unintended Survey Experiment
Articles in the same Issue
- Frontmatter
- Research Articles
- Overconfidence and Public Intoxication Arrest: Evidence from a University Town Police Log
- The Changing Determinants of Juvenile Crime
- Failing Young and Temporary Workers? The Impact of a Disruptive Crisis on a Dual Labour Market
- Productivity, Innovation Spillovers, and Mergers: Evidence from a Panel of U.S. Firms
- Trade Policies and FDI with an Endogenous Market Structure
- Is There a Business Cycle Effect on the Incidence of Dual Job Holding?
- The Impact of Environmental Taxation on Wage Inequality in the Presence of Subsidizing Renewable Energy
- The Competitive Foundations of Price Cap Regulation
- Letters
- Exploring the Existence of a Short-Run Kuznets Curve: Does the Fourth Industrial Revolution Affect Income distribution?
- MRS Functions and the Pareto Interval in Public Good Provision
- Optimal Imprisonment with General Enforcement of Law
- Immigration and Perceived Social Position. Insights from an Unintended Survey Experiment