THE IMPACT OF INCOME INEQUALITY ON ECONOMIC GROWTH

Abstract

The current article examines the relationship between income inequality and
economic growth using the Gini coefficient to measure income inequality and the GDP per
capita to measure economic growth. The study shows a complex relationship between
income inequality and economic growth, and the impact can vary depending on the specific
context of a country. However, the results suggest that high levels of income inequality can
have a negative impact on economic growth, as it limits access to education, healthcare, and
other social services for low-income individuals, which can impede their ability to be
productive members of the workforce. Additionally, when a large portion of wealth is
concentrated in the hands of a small group of people, it can lead to reduced consumer
spending, which can slow economic growth.