Effects of Aging on Income Inequality: Developing Countries vs. Developed Countries

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Amiri Hossein; Karim Mohammad Hossein; Shamaei Ali

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Journal Paper

Paper Information

Journal: International Journal of Business and Development Studies Year:2023 | Volume:15 | Issue:1 Page(s): 245-257

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Information Journal Paper

Title

Effects of Aging on Income Inequality: Developing Countries vs. Developed Countries

Author(s)

Amiri Hossein | Karim Mohammad Hossein | Shamaei Ali | Issue Writer Certificate

Keywords

population structure

Oil Rent

GMM Method

Gini coefficient

GDP per capita

Abstract

Aging and its consequences have made population aging a major social issue. Aging populations are likely to exacerbate inequality by increasing the public and private financial burdens of social welfare costs. The goal of this study was to estimate the effects of aging on income inequality for 81 countries (37 developing and 44 developed) from 2000 to 2020. The study used a dynamic panel approach in a generalized method of moments (GMM) framework. This study's findings confirm a positive relationship between aging and income inequality in both developing and developed countries, and it demonstrates that the aging effect on income inequality is greater in developing countries than in developed countries. Furthermore, improving human capital, increasing per capita income, proper management, and use of total natural resource rents (% of GDP) in countries, and increasing trade between countries reduce income inequality, according to the findings of this study. Policymakers should reduce income inequality by investing in education, increasing per capita income, managing, and utilizing total natural resource rents (as a percentage of GDP), expanding trade with other countries, and planning for the effects of aging.

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