Economic Growth, Unemployment, and Income Inequality: The Case of Brics-T Countries

Abstract

Income inequality is among the most important issues that await solutions in both academic writing and economic debates. Income inequality is associated with many factors such as growth, inflation, unemployment, education, and productivity. In studies examining the relationship between income distribution and economic growth, the findings give different results due to the method, data set and periodical differences. Unemployment is one of the most important factors affecting income inequality. Unemployment leads to deterioration in the balance of production and consumption and a decrease in investments, which deepens poverty and income inequality. In this empirical study, the effects of economic growth and unemployment rate on income inequality were investigated using a panel data set consisting of BRICS-T countries for the period of 2002-2018. The findings of the study revealed that increases in economic growth and unemployment rates in BRICS-T countries during the research period increase income inequality. The findings of this study provide empirical evidence for the implementation of economic and social policies in middle-income countries. Ensuring economic success requires policies focused on reducing income inequality through income redistribution, as well as policies aimed at increasing employment.