Does equality reduce growth? Some empirical evidence

Abstract

This study intends to provide some empirical evidence on the connection between equality and growth. Accordingly, two different samples of countries have been explored over the last three decades using panel data. In the first subsample, encompassed by medium income nations, the relationship between equality (proxied by the Gini index) and growth seems to be hump shaped. In the second subsample, made up by high-income countries, the connection is unambiguously negative – more equality is detrimental for growth. These results suggest that the impact of equality on growth may be different at the various stages of development.