Wealth inequality and economic growth
Evidence from the World Inequality Database
Bibliographic Data
| ID | 6460438 |
|---|---|
| Authors | Rachel Steenbrink, Ahmed Skali (0000-0002-4753-3280, University of Groningen, corresponding author) |
| Year | 2025 |
| Volume | 199 |
| Pages | 107250-107250 |
| Publication date | 2025-11-22 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | World Development (JOURNAL) |
| Journal identifiers | ISSN: 0305-750X • E-ISSN: 1873-5991 |
| Publisher | Elsevier BV (PUBLISHER) |
| DOI | 10.1016/j.worlddev.2025.107250 |
| OpenAlex | W7106333045 |
| Language | EN |
| Citations received | 1 |
| References cited | 55 |
Global evidence on the relationship between wealth inequality and economic growth (165 countries, 1995–2019). • 1 SD increase in wealth Gini linked to a 0.34 p.p. drop in annual growth rates. • Causal interpretation supported by system GMM estimates. • Results are highly robust to alternative specifications, inequality measures, and covariate selection techniques. Although it is often argued that wealth inequality matters more for economic growth than income inequality, this relationship has rarely been studied empirically, with a few exceptions covering a very restricted country sample or short timeframe. Leveraging hitherto unexploited wealth inequality data from the World Inequality Database, covering a panel of 165 countries between 1995 and 2019, we document a negative and statistically significant relationship between wealth inequality and economic growth. A one standard deviation increase in the wealth Gini coefficient within countries is associated with a 0.34 percentage points decline in growth rates. Instrumental variables support a causal interpretation of the results. The results survive a large battery of robustness checks, and we find no evidence to suggest a heterogeneous relationship.
Covariate · Developing country · Economic inequality · Gini coefficient · Income inequality metrics · Inequality · Instrumental variable · Panel data · Robustness (evolution) · Selection bias · Social inequality · Economic and Technological Innovation · Economic Growth and Development · Economic Growth and Productivity · Income, Poverty, and Inequality
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| Unique citing works | 1 |
|---|---|
| Citations per year | 1 |
| Citation span | 2026 - 2026 (1) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 1 |