Forging a link between human development and income inequality: cross-country evidence

ARZU ALVAN Department of Economics, Eastern Mediterrenean University, North Cyprus ( Turkey) Email: arzu.alvan@emu.edu.tr Tel. 0392 6301291/ 6302749

This study based on the evidence of ninety countries across the globe examines the possible linkage between human development and income inequality. Global inequalities in income and living standards widened between nations as well as within nations according to the latest annual United Nations Human Development Report. Cross-country evidence on income inequality and human developmet suggest that they are negatively correlated and causality runs in both directions. When human development is improved ( High Human Development), income distribution tends to be more fair, also when income distribution is more equal, human development tends to improve. On the other hand, medium and low levels of human development tend to increase income inequality.