- 2073-7009 (online)
Working papers from the Regional Development Policy Division of the OECD cover a full range of topics including regional statistics and analysis, urban governance and economics, rural governance and economics, and multi-level governance. Depending on the programme of work, the papers can cover specific topics such as regional innovation and networks, the determinants of regional growth or fiscal consolidation at the sub-national level.
Income Inequality, Urban Size and Economic Growth in OECD Regions
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- Vicente Royuela1, Paolo Veneri2, Raul Ramos1
- Author Affiliations
- 1: University of Barcelona, Spain
- 2: OECD, France
- 22 Dec 2014
- Bibliographic information
The purpose of this paper is to understand how income inequality is associated with economic growth in OECD regions and whether the degree and type of urban concentration affects this relationship. Both income inequality and urban concentration can be seen as patterns of resource allocation that are particularly interlinked at the regional level. We combine household survey data and macroeconomic databases, covering a period ranging from 2004 to 2012 for comparable regions in 15 OECD countries. Econometric results show that, at least for the short period under consideration, there is a general negative association between inequalities and economic growth, especially since the start of the economic crisis. This relationship is sensitive to the type of urban structure. Higher inequalities seem to be more detrimental for growth in large cities, while regions characterised by small cities and rural areas are less affected.
- OECD regions, urban, economic growth, inequality
- JEL Classification:
- O15: Economic Development, Innovation, Technological Change, and Growth / Economic Development / Human Resources; Human Development; Income Distribution; Migration
- R11: Urban, Rural, Regional, Real Estate, and Transportation Economics / General Regional Economics / Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- R12: Urban, Rural, Regional, Real Estate, and Transportation Economics / General Regional Economics / Size and Spatial Distributions of Regional Economic Activity