Yeung, Ion Lam. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2013. / Includes bibliographical references. / Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Abstracts also in Chinese.

This thesis contributes to two completely unrelated debates in the economic literature, similar only in the relatively high degree of controversy characterizing each one. <p>The first part is methodological and macroeconomic in nature, addressing the question of whether the distribution of income across countries is converging (i.e. are the poor catching up to the rich?) or diverging (i.e. are we witnessing the formation of two exclusive clubs, one for poor countries and another one for rich countries?). Applications of the simple Markov model to this question have generated evidence in favor of the divergence hypothesis. In the first chapter, I critically review these results. I use statistical inference to show that the divergence results are not statistically robust, and I explain that this instability of the results comes from the application of a model for discrete data to data that is actually continuous. In the second chapter, I reposition the whole convergence-divergence debate by placing it in the context of Silverman’s classic survey of non-parametric density estimation techniques. This allows me to use the basic notions of fuzzy logic to adapt the simple Markov chain model to continuous data. When I apply the newly adapted Markov chain model to the cross-country distribution question, I find evidence against the divergence hypothesis, and this evidence is statistically robust. <p>The second part of the thesis is empirical and microeconomic in nature. I question whether observed differences between husbands’ and wives’ participation in labor markets are due to different preferences or to different constraints. My identification strategy is based on the idea that the more power an individual has relative to his/her partner, the more his/her actions will reflect his/her preferences. I use 2001 PSID data on cohabiting couples to estimate a simultaneous equations model of the spousal time allocation decision. My results confirm the stylized fact that specialization and trade does not explain time allocation for couples in which the wife is the primary breadwinner, and suggest that power could provide a more general explanation of the observations. My results show that wives with relatively more power choose to work more on the labor market and less at home, whereas husbands with more power choose to do the opposite. Since women start out from a lower level of labor market participation than men do, it would seem that spouses’ agree that the ideal mix of market work and housework lies somewhere between the husbands’ and the wives’ current positions. / Doctorat en sciences économiques, Orientation économie / info:eu-repo/semantics/nonPublished

政府之公共支出及租稅結構差異會產生不同之所得分配效果；且為縮減國內赤字或債務，政府還會施行「財政重整」方案，以削減支出或提高租稅之方式，對各階層人民造成不同之衝擊。在所得分配不均之現況下，政府財政政策之公平面議題格外備受重視。因此，本文利用 17 個 OECD 國家於 1995 年至 2013 年之追蹤資料，探討在考量政府平常例行性之收支結構下，政府為特定政策目的採行財政重整措施時，對所得分配之影響。 本文之實證模型主要針對三種不同之財政重整類別進行分析。第一種財政重整變數討論當政府「同時」採行支出面及租稅面之財政重整時之重分配效果，結果顯示其對縮減貧富差距有正面之影響。而第二種及第三種財政重整類別則分別探討當政府僅施行支出面或僅施行租稅面之財政重整作為時，將會對社會所得分配不均的情況分別產生如何之改變。最終分析結果發現，支出面之財政重整及租稅面之財政重整亦皆具有使所得分配趨於均一之效果；且其中僅實施支出面財政重整時之重分配效果最強，其次為同時採行兩面向財政重整之時，而僅實施租稅面財政重整則相對效果最小。 因此可知，若政府施行適當之財政重整方案，則可於縮減國家債務之同時，也享有減緩社會所得分配不均的好處。但若同時採用兩面向之財政重整，則支出面重整之重分配效果將被微幅抵消。 / A government’s structure of public spending and taxation will have impact on social income distribution. Moreover, in order to reduce domestic deficit or debt, a government may implement “fiscal consolidation” programs, which will impose shock on each income stratum in the ways of cutting spending or increasing taxation. On the current situation of income inequality, the fairness issue of government’s fiscal policies has been highly emphasized. As a result, I use the data of 17 OECD countries during 1995 to 2013 to discuss the influence of fiscal consolidation on income distribution as well as considering the routine public spending and tax structure. The regression model in this paper mainly analyzes three different categories of fiscal consolidation. The first fiscal consolidation variable examines the redistribution effect when the government conducts spending-based consolidation and tax-based consolidation “simultaneously”. The result shows that it could shorten the income gap. The second and third categories analyze how income inequality would be changed when “only” implementing spending or tax-based consolidation respectively. And the result shows that both spending and tax-based consolidation can improve the condition of income distribution. Moreover, the redistribution effect of spending-based consolidation is the greatest, followed by the implementation of both two categories. The tax-based consolidation has the smallest effect on income redistribution. Hence, when the government conducts proper fiscal consolidation programs, it can enjoy the benefit of reducing debt and mitigating income inequality in the meantime. But if the government conducts spending and tax-based consolidation simultaneously, the redistribution effect will be slightly offset.

Thesis (PhD)--Stellenbosch University, 2015 / ENGLISH ABSTRACT: Twenty years after the end of apartheid, South Africa remains one of the most unequal countries in the world. Socio-economic polarisation is entrenched by the lack of social capital and interactions across racial and economic divides, blocking pathways out of poverty. This dissertation examines social mobility and cohesion in post-apartheid South Africa by considering three related topics. Chapter 2 of the dissertation examines the impact of school quality on the academic performance of disadvantaged learners as one of the most important enforcing factors perpetuating the social and economic divides. Given the historic racial and economic stratification of the South African public school system, many black children are sent to historically white public schools as a way to escape poverty. Using longitudinal data, this chapter estimates the effect of attending a historically white school on the numeracy and literacy scores of black children. The main challenge is to address the selection bias in the estimates, for which a value-added approach is implemented in order to control for unobserved child-specific heterogeneity. In addition, various household covariates are used to control for household-level differences among children. The results indicate that the attendance of a former white school has a large and statistically significant impact on academic performance in both literacy and numeracy which translates into more than a year’s worth of learning. The main finding is robust to various robustness checks. In Chapter 3 the dissertation examines social cohesion by considering the concept of reference groups used in the evaluation of relative standing in utility functions. The chapter develops a model in which various parameters are allowed to enter the utility function without linearity constraints in order to determine the weight placed on the well-being of individuals in the same race group as the respondent versus all the other race groups living in one of three specified geographic areas. The findings suggest that reference groups have shifted away from a purely racial delineation to a more inclusive one subsequent to the country’s first democratic elections in 1994. Although most of the weight is still placed on same-race relative standing, the estimates suggest that individuals from other race groups also enter the utility function. The chapter also examines the spatial variation of reference groups and finds evidence that the relative standing of close others (such as neighbours) enter the utility function positively while individuals who live further away (strangers) enter the utility function negatively. Finally, Chapter 4 provides a summary of the dynamics of income in South Africa, using longitudinal household data. Chapter 4 is aimed at separating structural trends in income from stochastic shocks and measurement error, and makes use of an asset-based approach. It first estimates the percentage of individuals who were in chronic poverty between 2010 and 2012 and then estimates the shape of structural income dynamics in order to test for the existence of one or more dynamic equilibrium points, which would be indicative of the existence of a poverty trap. The findings do not provide any evidence for the existence of a poverty trap. In addition, contrary to earlier findings, the results do not provide evidence for the existence of an asset-based threshold at which the structural income accumulation paths of households bifurcate. Instead, the results seem to indicate the existence of a threshold beyond which structural income remains persistent with very little upward mobility. The robustness of the results is confirmed by making use of control functions in order to correct for any measurement error which may exist in the data on assets. / AFRIKAANSE OPSOMMING: Twintig jaar nadat apartheid beëindig is word Suid-Afrika steeds as een van die wêreld se mees ongelyke lande gekenmerk. Sosio-ekonomiese polarisasie word verskans deur die gebrek aan sosiale kapitaal en interaksies tussen rassegroepe en ekonomiese klasse, wat lei tot die versperring van roetes uit armoede. Hierdie proefskrif bestudeer sosiale mobiliteit en samehorigheid in post-apartheid Suid- Afrika deur middel van drie verwante onderwerpe. Hoofstuk 2 van hierdie proefskrif ondersoek die impak van skoolkwaliteit op die akademiese prestasie van benadeelde leerders as een van die belangrikste faktore wat huidige sosiale en ekonomiese skeidings afdwing. Gegewe die historiese verdeling van die openbare skoolstelsel volgens ras en ekonomiese status, word heelwat swart kinders na historiese blanke skole gestuur ten einde armoede te ontsnap. Deur gebruik te maak van paneeldata word die impak van skoolbywoning van ’n historiese blanke skool op die geletterheid van swart kinders - in beide wiskunde en Engels - beraam. Die grootste uitdaging is om enige sydigheid in die beramings aan te spreek, waarvoor daar van ’n waarde-toevoegings inslag gebruik gemaak word ten einde te kontroleer vir enige individuele heterogeniteit. ’n Verskeidenheid kontroles op die vlak van die huishouding word gebruik ten einde te kontroleer vir verskille tussen kinders uit verkillende huishoudings. Die resultate dui daarop dat bywoning van ’n historiese wit skool ’n groot en statisties beduidende impak op die akademiese prestasie van beide wiskundige asook litterêre geletterdheid het, wat omgeskakel kan word in meer as ’n jaar se leerwerk. ’n Verskeidenheid verifikasie toetse bevestig die geldigheid van die resultate. Hoofstuk 3 van die proefskrif bestudeer sosiale samehorigheid deur die samestelling van verwysingsgroepe in die evaluasie van relatiewe posisionering in nutsfunksies te oorweeg. Die hoofstuk ontwikkel ’n model waarin verskeie parameters sonder liniêre beperkings in die nutsfunksie toegelaat word ten einde die gewig te beraam wat geplaas word op die welstand van individue in dieselfde rasgroep as die respondent teenoor al die ander rasgroepe wat in een van drie gespesifiseerde geografiese areas woon. Die bevindings dui daarop dat, na die land se eerste demokratiese verkiesings in 1994, die definiering van verwysingsgroepe weggeskuif het van ’n verdeling volgens ras na ’n meer inklusiewe definisie. Alhoewel meeste van die gewig steeds geplaas word op relatiewe posisionering teenoor individue van dieselfde ras, dui die beramings daarop dat individue van ander rassegroepe ook ingesluit word in die nutsfunksie. Die hoofstuk beoordeel ook die ruimtelike variasie van verwysingsgroepe en bevind dat die relatiewe posisionering van nabye individue (soos byvoorbeeld bure) die nutsfunksie positief beïnvloed terwyl individue wat vêr weg woon (vreemdelinge) die nutsfunksie negatief beïnvloed. Hoofstuk 4 van die proefskrif sluit af met ’n opsomming van die inkomste dinamika in Suid-Afrika, deur gebruik te maak van paneelhuishoudingdata. Die laaste hoofstuk mik om die strukturele tendens in inkomste van enige stogastiese skokke en metingsfoute te isoleer en maak gebruik van ’n bate-gebasseerde inslag. Dit beraam eerstens die persentasie van individue wat in kroniese armoede verkeer het tussen 2010 en 2012 en beraam dan die vorm van die strukturele inkomste dinamika. Dit word gedoen ten einde vir die bestaan van een of meer dinamiese ekwilibrium punte te toets, wat aanduidend sou wees van die bestaan van ’n armoedestrik. Die bevindings bied nie enige bewyse vir die bestaan van ’n armoedestrik nie. Ook bied die resultate geen bewyse vir die bestaan van ’n bategebasseerde drempel waar die strukturele inkomste akkumulasieroetes van huishoudings vertak nie, in teenstelling met vorige resultate. In plaas daarvan, blyk die resultate te dui op die bestaan van ’n drempel waarna strukturele inkomste volhardend bly met baie min opwaardse mobiliteit. Die geldigheid van die resultate word bevestig deur gebruik te maak van kontrolefunksies ten einde te korrigeer vir enige metingsfoute wat moontlik in die data van bates mag bestaan.

This thesis explores the poverty alleviation and peace-spoiling power of the mineral extraction sector in the Democratic Republic of the Congo to arrive at a set of strategic goals for the country moving forward. Although subterranean minerals are often a source or perpetuator of violence, the potential to lift the country’s rural communities out of extreme poverty makes the mining industry an essential part of the nation’s development strategies. Lessons from Tanzania, Côte d’Ivoire, Guinea, Ethiopia, Zimbabwe, Nigeria, Ghana, Zambia, Uganda and Sierra Leone to arrive at best practices for increasing the multiplier effect of large-scale mining, formalization, beneficiation, capital resource development, stakeholder harmonization and conflict control. The study also finds that in order to smoothly construct and implement new programs, the traditional roles and positioning of government, corporate and community stakeholders must change toward increased inclusion.

Diese Dissertation besteht aus vier Aufsätzen, die sich mit der funktionalen Einkommensverteilung beschäftigen und leistet einen Beitrag in den Bereichen Arbeitsmärkte und Makroökonomie. Der erste Aufsatz ist ein Literaturüberblick über den Einkommensanteil von Arbeit am Gesamteinkommen. Der zweite Aufsatz analysiert den Einfluss von Informations- und Kommunikationstechnologien (IKT) auf den relativen Lohnanteil von hoch-, mittel- und niedrig qualifizierten Arbeitnehmern. Die Ergebnisse der Untersuchung legen nahe, dass IKT die relativen Lohnanteile beeinflusst, dieser Einfluss jedoch nicht im gleichen Maße über Zeit und Länder auffindbar ist. Einzelne Industrien werden aufgezeigt, in denen Investitionen in IKT den relativen Lohnanteil hochqualifizierter Arbeitnehmer steigern. In anderen Industrien führen Investitionen in IKT zu einer Polarisierung am unteren Ende der Verteilung. Der dritte Aufsatz untersucht die Einflüsse auf die Lohnquote in Westeuropa. Die Studie zeigt einen großen und persistenten negativen Einfluss von internationaler wirtschaftlicher Integration auf die Lohnquote über die mittlere Frist. Starke Arbeitsmarktinstitutionen steigern die Lohnquote. Der vierte Aufsatz untersucht durch welchen Kanal IKT die Lohnquote beeinflusst. Das Modell von Bental und Demougin (2010), welches die Hypothese aufstellt, dass die Lohnquote fällt da IKT die Beobachtbarkeit von Anstrengung erhöht und so die Informationsrente der Arbeitnehmer bei gleicher Anstrengung senkt, wird zu Daten von neun Westeuropäischen Ländern kalibriert. Dies zeigt, dass das Modell die Trends der Lohnquote als auch die der Reallöhne in Effizienzeinheiten und der Arbeit in Effizienzeinheiten durch den Kapitalstock, replizieren kann. Desweiteren zeigt die Analyse von Individualdaten aus dem Deutschen Sozio-Ökonomischen Panel, dass die gefühlte Beobachtung der Arbeitsleistung im Durchschnitt zwischen 1985 und 2001 gestiegen ist. / This dissertation consists of four essays on the functional distribution of income and contributes to the body of research on labor markets and macroeconomics. The first essay reviews the literature on the income share of labor. The second essay analyzes empirically the impact of investments into information and communication technology (ICT) on the relative compensation of high-, medium-, and low-skilled workers. The results imply that, although ICT investments influence the relative demand of workers by skill, this impact is not persistent over time and across countries. Nevertheless, individual industries are identified in which ICT investments increase the relative compensation of high-skilled workers and industries in which ICT investments polarize compensation at the bottom of the skill distribution. The third essay investigates the empirical influences on the labor share in Western Europe. The results show a large and persistent negative impact of economic integration on the labor share in the medium-run for an industry-level measurement. Stronger labor market institutions increase the labor share. Furthermore, the results suggest a common negative impact of ICT and economic globalization on labor share, while ICT itself seems complementary to labor in production. The fourth essay assesses empirically through which channel ICT decreases the labor share. The model of Bental and Demougin (2010), which argues that ICT reduces the labor share by improving monitoring technology and therefore lowering the workers rent at every level of output, is calibrated and simulated using data from nine OECD countries. The results show that the model can generate the observable trends in the labor shares as well as real wages in efficiency units and labor in efficiency units over capital. Furthermore, an analysis of micro data from the German Socio-Economic Panel indicates an overall average increase of perceived monitoring of workers between 1985 and 2001.

Cette thèse étudie les causes et conséquences du processus de ségrégation résidentielle dans l’Afrique du Sud (AFS) post-Apartheid. Nous nous intéressons à plusieurs aspects encore débattus dans la littérature. Le premier concerne l’impact des préférences des individus pour la composition raciale de leur voisinage sur la ségrégation. Le second a trait à l’impact de la ségrégation résidentielle sur les niveaux de revenus des différents groupes raciaux. Le dernier quantifie les différentes causes de la ségrégation. Dans le premier chapitre, nous réconcilions la littérature théorique sur l’impact des préférences pour la composition raciale du voisinage avec les observations empiriques de niveaux décroissants de ségrégation aux US et en AFS. Nous soutenons l’idée que si les individus internalisent les apports économiques et sociaux de chaque nouvel arrivant dans leur voisinage alors des voisinages intégrés peuvent émerger. Cet effet est empiriquement plus fort que l’homophilie et le racisme. Dans le second chapitre, nous étudions l’impact de la ségrégation sur l’ensemble de la distribution des revenus. Nous montrons que la ségrégation a un effet positif sur les hauts revenus pour les Blancs tandis qu’elle a un effet négatif pour les Noirs au bas de la distribution. L’effet de la ségrégation est souvent plus important que l’effet de l’éducation. Enfin, dans le troisième chapitre, nous quantifions l’impact de chaque déterminant de la ségrégation. Nous trouvons que le manque d’accès aux services publics de base est le déterminant principal, alors que les différences de caractéristiques sociodémographiques ne comptent que pour une faible part pour les quartiers les plus ségrégués. / This thesis studies the causes and consequences of the residential segregation process in the post-Apartheid South Africa.Inside this general issue, we are interested in several aspects still debated in the literature on residential segregation. Thefirst concerns the impact of individuals’ preferences for the racial composition of their neighborhood on the segregationlevels. The second question deals with the impact of residential segregation on the income levels of each racial group. Thelast issue is related to quantifying the different causes of segregation.Three chapters constitute this thesis. In the first chapter, we reconcile the theoretical literature on the impact of preferencesfor the racial composition of the neighborhood with the empirical evidences of declining levels of segregation in theUnited-States and South Africa. We argue that if individuals internalize the economic and social life that a new entrantbrings with him, then integrated neighborhoods can emerge. This effect is empirically stronger than homophilly andracism. In the second chapter, we study the impact of residential segregation on the whole income distribution. We showthat residential segregation has a positif effect on top incomes for Whites, whereas it has a negatif effect for Blacks at thebottom of the distribution. The effect of residential segregation is even more important than the effect of education inmost cases. In the third chapter, we quantify the impact of each determinant of segregation. We find that the lackof access to basic public services is the main determinant, whereas differences in sociodemographics only account for asmall part in the most segregated areas.

Global civilisation, and therefore population health, is threatened by excessive inequality, weapons of mass destruction, inadequate economic and political theory and adverse global environmental change. The unequal distribution of global foreign exchange adjusted income is both a cause and a reflection of global social characteristics responsible for many aspects of these inter-related crises. ¶ The global distribution of foreign exchange adjusted income for the period 1964-1999 is examined. Using data for more than 99% of the global population, a substantial divergence in its distribution is found. The global Gini co-efficient, adjusted for national income inequality, increased from an already high value of 71% in 1964 to peak at more than 80% in 1995, before falling, very slightly, to 79% in 1999. The global distribution of purchasing parity power income is also examined, for a similar period. Though also found to be extremely unequal, its trend has not been to increased inequality. Implications of the differences between these two trends are discussed. ¶ A weighted time series index of global environmental change (IGEC) for the period 1960-1997 was also calculated. This uses nine categories of global time series environmental data, each scaled so that 100% represents the level of each category in nature prior to anthropogenic change; zero represents decline to a critical point. This index fell from 82% in 1960 to 55% in 1997, and will further decline during this century. ¶ Using evidence from several disciplines, it is argued that the decline in the IGEC correlates with major macro-environmental changes, which, combined with flawed social responses to scarcity and its perception, place at risk the ability of civilisation to function. This could occur because of the interaction of conflict, economically disastrous extreme climatic events, deterioration of other ecosystem services, regional food and water insecurity, and currently unforeseen events. Uncertainty regarding both a safe rate of decline and the tolerable nadir of the IGEC is substantial. ¶ Substantial reduction in the inequality of foreign exchange adjusted income is vital to enhance the development of policies able to reverse the decline in the environmental goods which underpin civilisation, and to promote the co-operation needed to maximise the chance that civilisation will survive.

<p>This thesis addresses the issue of weighted cost-benefit analysis (WCBA). WCBA is a welfare evaluation model where income distribution effects are valued by distributional weighting. The method was developed already in the 1970s. The interest in and applications of this method have increased in the past decade, e.g. when evaluating of global environmental problems. There are, however, still unsolved problems regarding the application of this method. One such issue is the choice of the approach to the means of estimating of the distributional weights. The literature on WCBA suggests a couple of approaches, but gives no clues as to which one is the most appropriate one to use, either from a theoretical or from an empirical point of view. Accordingly, the choice of distributional weights may be an arbitrary one. In the first paper in this thesis, the consequences of the choice of distributional weights on project decisions have been studied. Different sets of distributional weights have been compared across a variety of strategically chosen income distribution effects. The distributional weights examined are those that correspond to the WCBA approaches commonly suggested in literature on the topic. The results indicate that the choice of distributional weights is of importance for the rank of projects only when the income distribution effects concern target populations with low incomes. The results also show that not only the mean income but also the span of incomes, of the target population of the income distribution effect, affects the result of the distributional weighting when applying very progressive non-linear distributional weights. This may cause the distributional weighting to indicate an income distribution effect even though the project effect is evenly distributed across the population.</p><p>One rational for distributional weighting, commonly referred to when applying WCBA, is that marginal utility of income is decreasing with income. In the second paper, this hypothesis is tested. My study contributes to this literature by employing stated preference data on compensated variation (CV) in a model flexible as to the functional form of the marginal utility. The results indicate that the marginal utility of income decreases linearly with income.</p><p>Under certain conditions, a decreasing marginal utility of income corresponds to risk aversion. Thus the hypothesis that marginal utility of income is decreasing with income can be tested by analyses of individuals’ behaviour in gambling situations. The third paper examines of the role of risk aversion, defined by the von Neumann-Morgenstern expected utility function, for people’s concern about the problem of ‘sick’ buildings. The analysis is based on data on the willingness to pay (WTP) for having the indoor air quality (IAQ) at home examined and diagnosed by experts and the WTP for acquiring an IAQ at home that is guaranteed to be good. The results indicate that some of the households are willing to pay for an elimination of the uncertainty of the IAQ at home, even though they are not willing to pay for an elimination of the risks for building related ill health. The probability to pay, for an elimination of the uncertainty of the indoor air quality at home, only because of risk aversion is estimated to 0.3-0.4. Risk aversion seems to be a more common motive, for the decision to pay for a diagnosis of the IAQ at home, among young people.</p><p>Another rationale for distributional weighting, commonly referred to, is the existence of unselfish motives for economic behaviour, such as social inequality aversion or altruism. In the fourth paper the hypothesis that people have altruistic preferences, i.e. that they care about other people’s well being, is tested. The WTP for a public project, that ensures good indoor air quality in all buildings, have been measured in three different ways for three randomly drawn sub-samples, capturing different motives for economic behaviour (pure altruism, paternalism and selfishness). The significance of different questions, and different motives, is analysed using an independent samples test of the mean WTPs of the sub-samples, a chi-square test of the association between the WTP and the sample group membership and an econometric analysis of the decision to pay to the public project. No evidence for altruism, either pure altruism or paternalism, is found in this study.</p>

<p>The economic development and industrialization that has taken place in many parts of the world during the past century has brought about a huge increase in economic welfare. During this process, it has repeatedly been debated whether the gains from economic development are shared by everyone or just a few. In the field of economics, vast research has been conducted on this particular subject ever since the 1950’s. The most famous contribution might be said to be Simon Kuznets article, Growth and Income Inequality from 1955 and the ”inverted U”-hypothesis that was formulated on the basis of that article. The essence of the hypothesis is that a country, during its development, moves from agricultural to industrial production. At first, income inequality increases and then, at the end of the process, decreases.</p><p>The aim of this paper has been to investigate the relationship between income distribution and economic development in a particular region, namely the countries of the former Soviet Union, during 1992-2003. Also, we have tested whether Kuznets theory and the “inverted U”-hypothesis hold true for our sample. The investigations method is a survey, which uses secondary data collected from the World Bank’s database of World Development Indicators. Regression-analysis has been employed to conduct cross-sections between 20 countries over 4 periods in Eastern Europe and Central Asia. The number of observations equals to 62. The variables that we use are: the Gini index, GDP per capita and the agricultural sector’s share of GDP.</p><p>The results of the regression do not indicate any resemblance to the pattern of the “inverted U”-hypothesis. The curve we get is that of a “positive U”. Countries with high GDP per capita as well as countries with low GDP per capita have high income inequality. Countries with mediate GDP per capita levels have low income inequality. Our analysis concludes that the countries in our sample might have had a very unique economic development following the fall of the Soviet Union. Only 7 countries partly follow the Kuznets theory if tested individually. Since these seven countries seem to have a reversed development with increasing agricultural sector and the remainder of the countries show increasing income inequality, we reject the “inverted U”-hypothesis and question the ability of Kuznets’ theory to explain income distribution for our sample.</p>