Comparative Study of the Effect of Innovation on Income Inequality
Subject Areas : Innovation and Invention
Abolfazll Shahabadi
1
(Tarbiat Modares University)
Sara Sarygol
2
()
Keywords: Innovation, Income Inequality, OPEC Countries, Organization for Economic Cooperation and Development Countries,
Abstract :
In recent decades, the reduction of income inequality should be considered as the strategy of the major objectives of economic and social development and even the government. Therefore, analysis of income distribution and distributional effects of policies in order to increase economic growth has gained importance. On the other hand, the ability to achieve creative innovation using human resources as the first step is to convert knowledge into wealth. So, considering the critical importance of innovation in modern economies, the present study investigated the role of innovation on income inequality of OPEC countries and selected the OECD developed countries during the period 1995-2009. The results suggest that the status of OPEC countries compared to OECD countries in both the Gini index as well as innovation is weak and undesirable, due to the lack of coordination between macro-economic policies from one side and research and educational policies form other side. Also based on the results, most countries with better support for innovative activities have shown better income distribution. Thus, the movement of countries with economy and capital resources oriention towards knowledge-based economy, innovative activities support and reduce income inequality are essential orientations for macro-economic policies along with research and educational policies.