Income Inequality and Colonialism
36 Pages Posted: 22 Jun 2006
This paper proposes that colonialism is a major explanation behind today's differences in income inequality across countries. We argue that income inequality has been higher in the colonies where the percentage of European settlers to total population was higher, as long as Europeans remained a minority. The countries where Europeans became the majority of the population did not suffer from high inequality. These initial differences continue to hold today. The empirical evidence we provide strongly supports our thesis.
Keywords: Colonialism, Inequality, Income Dsitribution
JEL Classification: O15, O13, N90
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