Financial development and income inequality: A meta-analysis

Chletsos, Michael; Sintos, Andreas

doi:10.1111/joes.12528

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Financial development and income inequality: A meta-analysis

Chletsos, Michael; Sintos, Andreas

2022 • In Journal of Economic Surveys

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https://hdl.handle.net/10993/52768

DOI
10.1111/joes.12528

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Keywords :

Bayesian model averaging; financial development; income inequality; meta-analysis; publication bias

Abstract :

[en] The voluminous empirical research on the effect of financial development on income inequality has yielded mixed results. In this paper, we collect 2127 estimates reported in 116 published studies that investigate the effect of financial development on income inequality. Although our initial tests for publication bias (which do not account for moderator variables) show that the current literature does not suffer from publication selectivity, once we control for a set of moderator variables, we find evidence of mild publication bias in favor of positive estimates (i.e., the current literature favors the publication of studies that find that financial development increases income inequality). In addition, our results suggest that the overall effect of financial development on income inequality is on average zero, but that its sign and magnitude depend systematically on various study characteristics. The characteristics of data and estimation methods, whether endogeneity is taken into account, the different measures of financial development and the inclusion of financial openness, inflation and income variables in the regressions matter significantly for the effect of financial development on inequality.

Disciplines :

Business & economic sciences: Multidisciplinary, general & others
Finance
Quantitative methods in economics & management
Macroeconomics & monetary economics
Special economic topics (health, labor, transportation...)

Author, co-author :

Chletsos, Michael ^✱; University of Piraeus > Department of Economics

Sintos, Andreas ^✱; University of Piraeus > Department of Economics

^✱ These authors have contributed equally to this work.

External co-authors :

yes

Language :

English

Title :

Financial development and income inequality: A meta-analysis

Publication date :

August 2022

Journal title :

Journal of Economic Surveys

ISSN :

0950-0804

eISSN :

1467-6419

Publisher :

Wiley, Oxford, United Kingdom

Peer reviewed :

Peer Reviewed verified by ORBi

Additional URL :

https://onlinelibrary.wiley.com/doi/abs/10.1111/joes.12528

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since 15 November 2022

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