The Effects Of Income Inequality On Service Sector Growth

摘要

The objective of this paper is to investigate the effects of income inequality on the service sector growth of 45 countries from the period 1971 to 2010. The countries are divided into low, middle and high income groups, and the analysis is carried out in two sub-time periods, 1971 to 1990 and 1991 to 2010. The analysis reveals that during 1971-1990, the effect of income inequality on service sector growth is negative and significant for low and middle income countries, whereas it is insignificant for high income countries. During 1991-2010 the effect of income inequality on service sector growth is positive and significant for all country groups.