Publications  Income Distribution


1. The rate of growth has no systematic effect on income distribution. The argument has been made [Sheehan (1980), Griffin and Khan (1972)] that a high rate of growth increases inequality because it requires great rewards for such well-to-do groups as investors, managers and land owners. That conclusion is not borne out by our results, nor by the similarly inconclusive results of studies based on a smaller sample [e.g., Ahluwalia (1976a, b), Chenery et al. (1974), Cline (1975), Fields (1981), Papanek (1975)]. The reason may be the increase in labor income with rapid growth. Where rapid growth is not due to income from primary exports, a separate variable in our analysis, it is usually caused by growth in labor intensive activities. That labor intensive development is favorable for income distribution remains a hypothesis, with preliminary supporting evidence [see Papanek (1980, 1979a, b)].


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