The Cross-Sectional Impact of Income Inequality on Life Quality Indicators

Abstract

This paper studies the consequences that income inequality exerts on the life quality in a subset of selected countries. Specifically, I examine the impact of (log) GDP per capita and the Gini coefficient of income inequality on a set of life quality indicators. First, both life expectancy and infant mortality are improved when there is less inequality and the country is wealthier. Second, the effect on crime statistics is more mixed. While theft increases with GDP per capita, the inequality does not seem to play a role; conversely, homicide increases in inequality but remains unaffected by GDP. Plausible explanations for these empirical observations are offered throughout the paper.