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Article

Economic Complexity and Inequality: Does Regional Productive Structure Affect Income Inequality in Brazilian States?

1
Department of Geography and Environment, London School of Economics, Houghton Street, London WC2A 2AE, UK
2
Utrecht University School of Economics, Adam Smith Hall, International Campus Utrecht, Kriekenpitplein 21-22, 3584 EC Utrecht, The Netherlands
*
Author to whom correspondence should be addressed.
Sustainability 2021, 13(2), 1006; https://doi.org/10.3390/su13021006
Received: 18 December 2020 / Revised: 15 January 2021 / Accepted: 16 January 2021 / Published: 19 January 2021
(This article belongs to the Special Issue Economic Complexity and Sustainability)
Recent research on the effects of the productive structure of an economy has turned to examining whether economic complexity is associated with lower income inequality. In contrast to the commonly adopted approach that estimates the impact of economic complexity in a cross-country setting, we use panel data for Brazilian states to identify the relationship between economic complexity and income inequality at the sub-national level. Our findings show that the relationship between economic complexity and income inequality has an inverted U-shape, indicating that growing levels of complexity first worsen and then improve the income distribution in Brazilian states. Our findings also show that this relationship is particularly prominent in those states that have relatively high levels of urbanization and overall development. Furthermore, we identify separate effects on income inequality from the degree to which regional productive structures are characterised by diversity in terms of industries and occupations. These effects are particularly pronounced in less developed states with a more rural character. In combination, these findings confirm the important role that the productive structure plays in processes that drive improvements in income distributions and suggest that more research on this impact is warranted at the regional level. View Full-Text
Keywords: income inequality; productive structure; economic complexity; Brazil; regional income inequality; productive structure; economic complexity; Brazil; regional
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MDPI and ACS Style

Bandeira Morais, M.; Swart, J.; Jordaan, J.A. Economic Complexity and Inequality: Does Regional Productive Structure Affect Income Inequality in Brazilian States? Sustainability 2021, 13, 1006. https://doi.org/10.3390/su13021006

AMA Style

Bandeira Morais M, Swart J, Jordaan JA. Economic Complexity and Inequality: Does Regional Productive Structure Affect Income Inequality in Brazilian States? Sustainability. 2021; 13(2):1006. https://doi.org/10.3390/su13021006

Chicago/Turabian Style

Bandeira Morais, Margarida, Julia Swart, and Jacob A. Jordaan. 2021. "Economic Complexity and Inequality: Does Regional Productive Structure Affect Income Inequality in Brazilian States?" Sustainability 13, no. 2: 1006. https://doi.org/10.3390/su13021006

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