Personal Income Distribution And Economic Growth: The Case Of Brazilian Municipalities

Most of the literature regarding the relationship between economic growth and income distribution is related to the developed countries and, especially, to country-level analyses. Little attention has been paid to examining the way in which this relationship operates in emerging economies when a subnational dataset is used. This paper tries to fill this gap in the existing literature by estimating the relationship between personal income distribution and economic growth using a municipal level dataset for the 5565 Brazilian municipalities. To do that, we estimate different growth equations using the municipal Gini coefficient, municipal Theil Index and top 10 percent income share in a municipal level. The econometric results suggest a negative and statistical robust relationship between personal income inequality municipal economic growth.