EVALUATION OF THE FACTORS AFFECTING INCOME DISTRIBUTION IN OECD COUNTRIES WITH PANEL DATA ANALYSIS

Öz

The world economy received new impulses thanks to the acceleration of international trade and cooperation in the last decades and this process subsequently contributed to the growing research interest concerning the relative equality of the distribution of per capita income in various countries. Feeding into this, the issue of how rich-poor income inequality across the population shifts towards or away absolute zero has gained importance in relation to long term economic growth and equity. Thus, it is important to explore in-depth how or what the changes occurring in relation to the key aspects of income distribution would have on difference in income severity between the two groups in focus. The income inequality determinants in this paper are firstly investigated and then econometrically tested using 2001-2020 panel data for 25 OECD member countries. Due to cross-sectional dependence and cross-sectional heterogeneity present in the data, data is treated in the form of panel data. The series’ stationarity is tested using the Pesaran’s (2007) CIPS Panel Unit Root Test, which is classified amongst the second generation unit root tests. The relationship between the variables is also tested for a long run relationship in which case the Westerlund Panel Cointegration Test and the Estimation of Cointegration Coefficients Using the Panel AMG (Augmented Mean Group) method by Eberhardt and Bond are employed. The Dumitrescu Hurlin Panel Causality Test was used to assess the relationships, between the variables. The result of the study shows that a one percent increase in the consumer price index increases income inequality by 0.01%. Further, one unit increase in indirect tax, human development index political stability, and absence of violence/terrorism index decrease income inequality by 0.08%, 19.3%, and 0.04%, respectively. Hence, the result says that the concerned variables need to be considered while formulating policies for increasing income equality.

Anahtar Kelimeler

• Income Inequality
• Gini Index
• Panel Data Analysis

OECD ÜLKELERİNDE GELİR DAĞILIMINI ETKİLEYEN FAKTÖRLERİN PANEL VERİ ANALİZİ İLE DEĞERLENDİRİLMESİ

Öz

Son yıllarda küresel ticaretin ve uluslararası işbirliklerinin ivme kazanması, dünya ekonomisine yeni bir dinamik kazandırmış ve bu süreç, ülkeler arasındaki kişi başına düşen gelir düzeylerinin yakınsamasına yönelik ilginin artmasına zemin hazırlamıştır. Bu bağlamda, uzun vadede zengin ve yoksul kesimler arasındaki gelir dağılımının mutlak eşitlik seviyesine yakınsaması ya da ondan uzaklaşmasının incelenmesi, ekonomik kalkınma ve gelir adaleti açısından önemli bir araştırma konusu haline gelmiştir. Dolayısıyla, gelir dağılımını etkileyen temel faktörlerin, iki grup arasındaki gelir farklılıkları üzerindeki etkisinin kapsamlı bir biçimde analiz edilmesi gerekmektedir. Bu çalışmada, 25 OECD ülkesine ait 2001-2020 dönemine ilişkin veriler kullanılarak gelir adaletsizliğine etki eden faktörler öncelikle istatistiki, ardından ekonometrik yöntemlerle incelenmiştir. Verilerin yatay kesit bağımlılığı ve heterojen yapısı göz önüne alınarak panel veri analizi tercih edilmiştir. Serilerin durağanlığı, ikinci nesil birim kök testlerinden biri olan Pesaran (2007) CIPS Panel Birim Kök Testi ile değerlendirilmiştir. Panel eşbütünleşme ilişkisi ise Westerlund Panel Eşbütünleşme Testi ile incelenmiş, eşbütünleşme katsayılarının tahmini için Eberhardt ve Bond tarafından geliştirilen Panel AMG (Artırılmış Ortalama Grup) yöntemi kullanılmıştır. Değişkenler arasındaki nedensellik ilişkilerinin tespiti amacıyla Dumitrescu-Hurlin Panel Nedensellik Testi uygulanmıştır. Çalışma bulguları, tüketici fiyat endeksindeki artışın gelir eşitsizliğini %0,01 oranında artırdığını ortaya koymaktadır. Buna ek olarak, dolaylı vergiler, insani gelişim endeksi ve politik istikrar ile şiddet/terörizm yokluğu endeksindeki bir birimlik artışın sırasıyla %0,08, %19,3 ve %0,04 oranında gelir adaletsizliğini azalttığı tespit edilmiştir. Elde edilen bu sonuçlar, gelir dağılımını iyileştirme amacı güden politikaların oluşturulmasında, ilgili faktörlerin dikkate alınması gerektiğini göstermektedir.

Anahtar Kelimeler

• Gelir Eşitsizliği
• Gini Endeksi
• Panel Veri Analizi

Kaynakça

1. Aaberge, R., Björklund, A., Jäntti, M., Palme, M., Pedersen, P., Smith, N., & Wennemo, T. (1996). Income inequality and income mobility in the Scandinavian countries compared to the United States. Statistics Norway (Discussion Papers No. 168).
2. Achdut, L., & Kristal, O. (1993). Poverty in an international perspective: A reexamination (No. 95). LIS Working Paper Series.
3. Atkinson, A. B., Rainwater, L., & Smeeding, T. M. (1995). Income distribution in OECD countries: Evidence from the Luxembourg income study (OECD Social Policy Studies No. 18). Organisation for Economic Co-operation and Development.
4. Becker, I. (1998). Zur personellen einkommensverteilung in Deutschland 1993: Fortsetzung des trends zunehmender ungleichheit (EVS-Projekt Arbeitspapier Nr. 13). Johann Wolfgang Goethe-Universität.
5. Benabou, R. (1996). Inequality and growth. NBER Macroeconomics Annual, 11, 11-74.
6. Bilik, M. (2022). Income distribution-household debt relationship: OECD case. International Journal of Social and Economic Studies, 3(2), 43-55.
7. Boratav, K. (1976). Income distribution in 100 questions (3rd Edition). Gerçek Publishing.
8. Bozkurt, E., & Altıner, A. (2024). The impact of public social expenditures on income inequality in OECD countries: Panel quantile regression analysis. The International Journal of Economic and Social Research, 20(1), 95-111.

9. Demir, M. A. (2020). Income inequality and luxury goods imports: Panel causality analysis. Journal of Academic Researches and Studies, 12(23), 419-430.
10. Dumitrescu, E. I., & Hurlin, C. (2012). Testing for Granger non-causality in heterogeneous panels. Economic Modelling, 29(4), 1450-1460.
11. Eberhardt, M., & Bond, S. (2009). Cross-section dependence in nonstationary panel models: A novel estimator (Munich Personal RePEc Archive Paper No. 17692).
12. Ebimobowei, A., & Israel, O. (2021). Taxes and income inequality in Nigeria: Cointegration and error correction mechanism evidence from 1980–2018. Journal of Accounting and Management, 11(2), 14-30.
13. Efeoğlu, R. (2023). The impact of indirect and direct taxes on income inequality. Journal of Financial Politic & Economic Reviews, 60(665), 75-88.
14. Ensari, S. (1997). Income distribution over the last 20 years: 1973, 1987, 1994 studies and results. Economic Forum, (4), 16–22.
15. Eroğlu, N., Altaş, D., Ün, T., & Ulu, M. İ. (2017). The impact of social welfare expenditures on income distribution in OECD countries: A panel data analysis. International Journal of Economic Studies, 3(3), 335-354.
16. Förster, M. (1994). Measurement of poverty and low incomes in a perspective of international comparisons (OECD Labour Market and Social Policy Occasional Paper No. 14). Organisation for Economic Co-operation and Development.
17. Förster, M., & Pearson, M. (2000). Income distribution in OECD countries. Paper presented at the OECD Development Centre Conference on Poverty and Income Inequality in Developing Countries: A Policy Dialogue on the Effects of Globalisation, Paris.
18. Gottschalk, P., & Smeeding, T. (1997). Empirical evidence on income inequality in industrialised countries (LIS Working Paper No. 154). Luxembourg Income Study.
19. Gregg, P., & Wadsworth, J. (1996). It takes two: Employment polarisation in the OECD (Centre for Economic Performance Discussion Paper No. 304). Centre for Economic Performance, London.
20. Günay, E. K., & Topbaş, F. (2021). Impact of income inequality on the Human Development Index: Panel data analysis for BRICS countries. Academic Sensitivities, 8(17), 247-257.
21. Gustafsson, B., & Johansen, S. (1997). Income distribution in OECD countries. Journal of Economic Perspectives, 12(2), 143-157.
22. Karataş, M. (2019). The theoretical structure of income distribution. Hak-İş International Journal of Labor and Society, 8(21), 52-79.
23. Khan, A., Weili, L., & Khan, T. (2022b). Political stability, CO2 emissions, and income inequality: An empirical analysis. Journal of Development Economics, 145, 102-119.
24. Khan, H., Liu, W., & Khan, I. (2022a). The effect of political stability, carbon dioxide emission, and economic growth on income inequality: Evidence from developing, high-income, and Belt Road Initiative countries. Environmental Science and Pollution Research, 30, 6758-6785.
25. Küçükkaya, H. (2017). Income inequality in developed and developing countries: A panel data analysis [Unpublished Doctoral Dissertation]. Aydın Adnan Menderes University.
26. Kuznets, S. (1955). Economic growth and income inequality. American Economic Review, 45(1), 1-28.
27. Martinez-Vazquez, J., Moreno-Dodson, B., & Vulovic, V. (2012). The impact of tax and expenditure policies on income distribution: Evidence from a large panel of countries (International Center for Public Policy Working Paper No. 12-25). Andrew Young School of Policy Studies, Georgia State University.
28. Melchior, A., Telle, K., & Wiig, H. (2000). Globalisation and inequality: World income distribution and living standards 1960–1998. Royal Norwegian Ministry of Foreign Affairs Studies on Foreign Policy Issues, Report 6B. Oslo.
29. Nantob, N. Y. (2015). Income inequality and inflation in developing countries: An empirical investigation. Economics Bulletin, 35(4), 2888-2902.
30. Neumark, F. (1948). General economic theory (2nd Edition, R. Ş. Suvla, & A. A. Özeken, Çev.). İsmail Akgün Matbaası.
31. Pesaran, M. H. (2004). General diagnostic tests for cross section dependence in panels (Discussion Paper No. 1240). Institute of Labor Economics (IZA).
32. Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross-section dependence. Journal of Applied Econometrics, 22(2), 265-312.
33. Pesaran, M. H., & Yamagata, T. (2007). Testing slope homogeneity in large panels. Journal of Econometrics, March, 1–49.
34. Pesaran, M. H., & Yamagata, T. (2008). Testing slope homogeneity in large panels. Journal of Econometrics, 142(1), 50-93.
35. Piketty, T. (2003). Income inequality in France, 1901–1998. Journal of Political Economy, 111(5), 1004-1042.
36. Seyidoğlu, H. (1995). Dictionary of economic terms: Encyclopedic. Güzem Publications.
37. Sharafat, A. (2014a). Inflation and income inequality in Pakistan: A Johansen cointegration analysis. Economic Modelling, 37, 124-132.
38. Sharafat, A. (2014b). Inflation, income inequality and economic growth in Pakistan: A cointegration analysis. International Journal of Economic Practices and Theories, 4(1), 33-42.
39. Song, Y., Paramati, S. R., Ummalla, M., Zakari, A., & Kummitha, H. R. (2021). The effect of remittances and FDI inflows on income distribution in developing economies. Economic Analysis and Policy, 72, 255-267.
40. Stiglitz, J. (1969). The distribution of income and wealth among individuals. Journal of Political Economy, 77(1), 66-90.
41. Tatoğlu, F. Y. (2013). Advanced panel data analysis with Stata applications (2nd Edition). Beta Publishing.
42. Thiel, A. (2016a). Income inequality and human development. Economic Systems Research, 28(3), 201-224.
43. Thiel, F. (2016b). The effect of inequality on (human) development – Insights from a panel analysis of the Human Development Index [Master's Thesis]. University of Barcelona.
44. Türk, İ. (1985). Maliye politikası (6. Baskı). S Yayınları.
45. Türk, İ. (2003). Fiscal policy (15th Edition). Turhan Publishing.
46. Uysal, Y. (2007). Recommendations for regulating income distribution in Turkey in the context of relationships between types of income distribution. Dokuz Eylül University Journal of Social Sciences Institute, 9(2), 248-292.
47. Włodarczyk, J. (2024). Information and income distribution: The perspective of information economics. In D. R. Raban, & J. Włodarczyk (Eds.), The elgar companion to information economics (pp. 81-104). Edward Elgar Publishing.