INVESTIGATION OF THE REASONS OF INCOME INEQUALITY: AN EMPIRICAL ANALYSIS

Fatih Volkan AYYILDIZ

Purpose of the study is to measure the causes of income inequality between the years indicated in the data set countries. In this direction, descriptive variables such as population are included in explaining the causes of inequality, while economic variables such as tax, finance, growth are included. Although the reasons for income inequality have been explored for many years, disagreements over variables that are fully related are occurring. In this context, developed countries are heterogeneous in terms of income injustice, and the Nordic countries such as Norway, Iceland, Finland, Sweden have a Gini index of around 25 according to the 2012 data. This implies that income distribution provides a preliminary idea of the relationship with GDP, but some empirical analysis including this one suggests that this variable is insignificant. This also gave rise to the idea that the Gini index coefficient is a very regional, almost cultural, influenced structure. The work was carried out in the countries of Belarus, Brazil, Bulgaria, China, Colombia, Costa Rica, Dominican Republic, Georgia, Paraguay, Peru, Romania, Russian Federation Thailand, Turkey and 2002-2014. Although explanatory relevant researches are important to deal with in future researches, in this sample, variables affecting the income inequality positively are income taxes, population and foreign direct investments.

Keywords: Gini Index, Income Inequality, Reasons of Income Inequality