Journal of Economics Research and Social Sciences
Vol 7, No 1: February 2023

The Analysis of Income Gap in Lower Middle-Income Countries

Ardian Dwi Saputro (Department of Development Economics, Faculty of Economics and Business, Universitas Muhammadiyah Surakarta, Central Java)
Siti Aisyah (Department of Development Economics, Faculty of Economics and Business, Universitas Muhammadiyah Surakarta, Central Java)



Article Info

Publish Date
23 Feb 2023

Abstract

Sustainable economic growth is the goal of every country in the world. However, the economic growth that occurs is not in line with the welfare of the population in the lower middle-income countries. The high level of income inequality between the upper and lower classes indicates that there are problems that need to be resolved. This study aims to determine the direction and magnitude of the influence of trade openness, tax revenue, digital economy, corruption perception index, and government spending on the level of income inequality in six countries classified as lower Middle-Income countries in 2017-2021, namely (Bolivia, El Salvador, Honduras, Indonesia, Kyrgyzstan, and Ukraine) using panel data regression. The results with the Fixed Effects approach show that trade openness and the digital economy have a positive effect on the income gap, while government spending has a negative effect on the income gap. Meanwhile, tax expenditures and the corruption perception index have no effect on the income gap. Based on the results of this study, the government in each country should be able to pay attention to the development and support the economic facilities of the people in the lower middle class with various assistances that can directly increase their income.

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Journal Info

Abbrev

jerss

Publisher

Subject

Economics, Econometrics & Finance

Description

JERSS merupakan jurnal ilmiah yang dikelola Program Studi Ekonomi Fakultas Ekonomi dan Bisnis Universitas Muhammadiyah Yogyakarta. Jurnal ini berisikan penelitian-penelitian yang dilakukan oleh mahasiwa-mahasiswa dan berkolaborasi dengan para dosen dalam bidang studi ilmu ekonomi pembangunan. ...