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Growth Presentation PDF
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
G. Marrero1
J.Rodriguez2
Estimation
Results and
Conclusions
Comments
and Critics
1 Departament
2 Departamento
Results and
Conclusions
Comments
and Critics
WHY?
Income inequality affects growth through different channels
2 / 29
Inequality
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
savings
growth
investment project size
Estimation
Results and
Conclusions
Comments
and Critics
growth
entrepreneurial activity
3 / 29
Outline
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
Estimation
Data
Estimation
Results and
Conclusions
Comments
and Critics
4 / 29
Estimation
Results and
Conclusions
Comments
and Critics
total inequality =
inequality of opportunity + inequality of effort
{z
} |
{z
}
|
(IO)
(IE )
6 / 29
7 / 29
Inequality of Opportunity
Effect on economic growth
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
Estimation
Results and
Conclusions
Comments
and Critics
8 / 29
Data
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
Estimation
Results and
Conclusions
Comments
and Critics
here
9 / 29
Theil 0 Decomposition
Index of Inequality
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
Estimation
Results and
Conclusions
Comments
and Critics
IE
here
10 / 29
Data
Estimation
Results and
Conclusions
Race:
white
non-white
Comments
and Critics
Econometric Specification
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
Estimation
Results and
Conclusions
Comments
and Critics
Econometric Specification
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
Estimation
Results and
Conclusions
Comments
and Critics
13 / 29
Main results
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
Estimation
Results and
Conclusions
Comments
and Critics
14 / 29
Main results
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
Estimation
Results and
Conclusions
Comments
and Critics
15 / 29
Main results
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
Estimation
Results and
Conclusions
Comments
and Critics
16 / 29
Estimation approach
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
Estimation
Results and
Conclusions
Comments
and Critics
17 / 29
Research
Question and
Motivation
Data
where: = (1 + )
Model includes:
Estimation
Results and
Conclusions
Comments
and Critics
lnYi,t = lnY
i,t1 + INEQi,t + Xi,t + Tt + i,t
Set of equations in levels where the instruments of the levels are
suitable lag of their own first differences
(i.e. lnYi,ts INEQi,ts andXi,ts for s 2)
18 / 29
Estimation results
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
Variable
Total inequality
Inequality return to effort
Estimation
Inequality of opportunity
Results and
Conclusions
Comments
and Critics
Income lag
College
Fertility rate
Hansen J-test (p-value)
m1-test(p-value)
Num. observ.
Ln Income pc
(Small)
(Base)
18.528
24.216
(1.22)
(2.43)
0.566
0.283
(6.70)
(1.92)
1.117
1.794
(4.13)
(4.09)
0.364
(3.20)
0.262
0.442
0.003
0.084
78
78
Ln Income pc
(Small)
(Base)
53.607
(2.09)
98.852
(1.82)
0.617
(5.09)
0.869
(3.33)
0.365
0.008
78
60.736
(3.17)
80.448
(1.89)
0.351
(3.05)
1.521
(3.99)
0.369
(4.36)
0.598
0.010
78
19 / 29
Estimation results
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
Estimation
Results and
Conclusions
Comments
and Critics
Theil 0
IO ratio
IE(IO-IE model)
IO(IO-IE model)
Growth (x100)
Pc real income
Pc real income, logs
Mean
0.1128
0.1457
0.0957
0.0172
20.190
14363
9.5501
Std
0.0527
0.0948
0.0436
0.0154
6.110
3062
0.2134
20 / 29
Conclusions
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
Estimation
Results and
Conclusions
Comments
and Critics
21 / 29
Positive Points
Internal Validity
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
Estimation
Results and
Conclusions
Comments
and Critics
Results robust to the sample size (use 20, 30, 70 and 100
obs)
22 / 29
Positive Points
External Validity and Contribution
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
External validity:
Inequality of opportunity negative impact on growth
Research
Question and
Motivation
Data
Estimation
Results and
Conclusions
Comments
and Critics
Contribution:
They analyze income inequality as a composite measure
to isolate each of the two effects
23 / 29
Negative Points
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
Estimation
Results and
Conclusions
Comments
and Critics
24 / 29
References
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
[1] Gustavo A. Marrero, Juan G. Rodriguez. (2013). Inequality of opportunity and growth, Journal of Development Economics, 104: 107-122
Estimation
Results and
Conclusions
Comments
and Critics
here
25 / 29
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Research
Question and
Motivation
Data
Estimation
Results and
Conclusions
Comments
and Critics
Any questions?
26 / 29
Appendix
Data Selection
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
Appendix
main
27 / 29
Appendix
Theil 0 decomposition
Inequality of
Opportunity
and Growth
T (v )
| {z }
Marrero &
Rodriguez
total inequality
Appendix
= T (
v) +
| {z }
IO
M
X
pm T (v m )
|m=1 {z
IE
where:
v = (v 1 , .., v m ) vector of partition of income into M
groups
m
T (
v ) = ln yy mean logarithmic deviation of average
income of group m to average total income
v m percentage of income of a certain group m over all
income
pm frequency of type m in the population
Back to
main
28 / 29
Appendix
Lags of variables as instruments
Inequality of
Opportunity
and Growth
Marrero &
Rodriguez
In general,
ln Yit = i + ln Yit1 + it
Appendix
+it it1
29 / 29