Human Capital, Income Inequality, and Health: Analysing Heterogeneous Dynamics Across Income Groups

Abstract

This paper examines the impact of human capital, gender inequality, and GDP on income inequality across seven regions with different income levels. Utilising panel data from 125 countries from 2000 to 2018, the study employs methods such as Panel Spatial Correlation Consistent dummy variables (PSCC) and panel quantile regression. The findings reveal that income level significantly influences the relationship between human capital and income inequality on GDP. Political stability and total population positively affect GDP in all income groups, whereas gender inequality negatively impacts GDP in high-income countries but positively in low-income countries. The study also investigates the correlation between the Gini coefficient and the Gender Inequality Index (GII). Results indicate a positive correlation between the lagged Gini coefficient and its current values, demonstrating the persistence of income inequality. The findings suggest that policymakers can reduce income inequality and promote economic growth through progressive taxation, social welfare programs, and labour market regulations. Policies targeting gender inequality can also influence income inequality and GDP. This research provides insights into the complex interplay between income inequality, gender inequality, and GDP, offering guidance for policymakers to design effective strategies for sustainable economic growth and inequality reduction.