Breaking the Vicious Circle of Inequality and Unproductivity: Lessons from International Evidence
DOI:
https://doi.org/10.17533/udea.le.n102a354958Keywords:
distribución del ingreso, Productividad Total de los Factores, Formación, política fiscal, inclusión financiera, competenciaAbstract
Inequality and low productivity are statistically correlated in Colombia and around the world, suggesting the existence of a vicious circle between both problems. Against this background, this paper reviews the theory and international empirical evidence in order to identify the possible common causes of both phenomena. The article focuses on the policy variables that have the most robust effects on income distribution and productivity in developing countries, namely: (i) early formation of cognitive and non-cognitive skills, (ii) fiscal policies focused on direct taxes and targeted transfers, (iii) financial inclusion, and (iv) competition policies. On this basis, strategies are proposed to break the vicious circle of inequality and unproductivity in Colombia.
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