The stability of the Kuznets curve: some further evidence

Abstract

This paper examines the stability of the (cross-sectional) Kuznets curve with focus on the international comparability of both income distribution and income data. If the Kuznets curve changes its slope, or if the relationship between income and income inequality is not stable over time, then, the validity of using the cross-sectional Kuznets curve to test the Kuznets hypothesis is considerably weakened, and consequently the results from a cross-section of countries may not be used to predict the secular development of a country. For reasonable international comparability, household income distribution data and per capita GDP data based on purchasing power parity are employed in this paper. We show that, contrary to a previous finding, the (cross-sectional) Kuznets curve is stable.