Economic Development and Income Inequality. A Re-examination of Kuznets's Law.

In Kuznets's (1955) classic paper on the relationship between economic growth and income inequality, the process of population shift from traditional to modern activities forms the basis of the theory of distributional change during the process of development. This relationship, known at Kuznets's law, which postulates that income inequality first increases and then decreases during the development process, is re-examined in this paper using data for fifteen developing countries.