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Natural resource booms and inequality: Theory and evidence

Goderis,B.V.G.
; 
Malone,S.W.
Abstract
We develop a theory, in the context of a two-sector growth model in which learning-by-doing drives growth, to explain the time path of income inequality following natural resource booms in resource-rich countries. Under the condition of a relatively unskilled labor intensive non-traded sector, inequality falls immediately after a boom, and then increases steadily over time until the initial impact of the boom disappears. Using data for 90 countries between 1965 and 1999, we find evidence in support of the theory, especially for oil and mineral booms. We also find that uncertainty about future commodity prices increases long-run inequality.
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Date
2011
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Tilburg University Research Output Collection
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Keywords
SDG 1 - No Poverty, SDG 8 - Decent Work and Economic Growth, SDG 10 - Reduced Inequalities
Citation
Goderis, B V G & Malone, S W 2011, 'Natural resource booms and inequality : Theory and evidence', Scandinavian Journal of Economics, vol. 113, no. 2, pp. 388-417. https://doi.org/10.1111/j.1467-9442.2011.01659.x
URI
https://hdl.handle.net/20.500.14602/55117
License
info:eu-repo/semantics/closedAccess
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