Analysis on the Causes of Increase in Income Inequality using Country Panel Data (in Korean)

Recently, there has been growing concerns over income inequality because an expansion of income inequality may hinder social integration, and eventually reduce potential economic growth. Previous studies show that income inequality is related to factors such as per capita income, government social expenditure, inflation, trade openness and technological advances. Although labor income share, human capital formation, ratios of self-employed and temporary workers are important variables that can influence income inequality, no previous studies have yet carried out an empirical examination on such variables. This paper conducts an empirical analysis regarding the above mentioned three factors using country panel data. And this paper uses the system GMM method to draw conclusions by thoroughly addressing the endogenicity problem. The empirical analysis result shows that a rise in the labor income share or the level of education reduces income inequality while a rise in the ratio of self-employed or that of temporary workers increases income inequality.