The Impact of Non-renewable Resource Abundance on Income Inequality in Developed Countries: A Pooled Mean Group (PMG) Approach

Authors
edris karimi
zahra faturechi
Mohaghegh Ardabili University
Abstract
Today, benefits from energy sources, especially non-renewable sources, can have various effects on economic indicators, and for this reason, it has risks for the economy and society. One of these important economic indicators is income inequality, which over time leads to many problems for societies. In this research, the effect of dependence on non-renewable natural resources on the income inequality of developed countries has been investigated. This dependence has been re-examined by separating non-renewable resources into fossil and non-fossil resources. The data of the study was collected from 25 developed countries during the years 1990 to 2019, and after making sure that no false regressions occurred during the estimation, an econometric study was conducted between the variables. According to the short-term and long-term estimation results obtained from the consolidated group average approach, it was determined that although in the short-term dependence on natural resources has no effect on income distribution, in the long-term two variables dependence on total non-renewable natural resources and dependence on fossil non-renewable natural resources have a negative effect and Significant as well as the variable of dependence on non-renewable non-fossil natural resources had a negative and insignificant effect on inequality. It was also determined that the control variables used such as: education, globalization and institutional quality can reduce income inequality in developed countries.


Keywords
Developed Countries
non-renewable natural resources
fossil resources
non-fossil resources
income inequality
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