Ka oun zos, Panagio is; Giannakopoulos, Nikolaos T.; Sakas, Damianos P.; Migkos,
S a os P.
A icle
A ale o wo economies: Diach onic compa a i e analysis
o di e ging pa hs o g ow h and inequali y in he Uni ed
S a es and he Uni ed Kingdom
Economies
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Sugges ed Ci a ion: Ka oun zos, Panagio is; Giannakopoulos, Nikolaos T.; Sakas, Damianos P.;
Migkos, S a os P. (2024) : A ale o wo economies: Diach onic compa a i e analysis o di e ging
pa hs o g ow h and inequali y in he Uni ed S a es and he Uni ed Kingdom, Economies, ISSN
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Ci a ion: Ka oun zos, Panagio is,
Nikolaos T. Giannakopoulos,
Damianos P. Sakas, and S a os P.
Migkos. 2024. A Tale o Two
Economies: Diach onic Compa a i e
Analysis o Di e ging Pa hs o
G ow h and Inequali y in he Uni ed
S a es and he Uni ed Kingdom.
Economies 12: 274. h ps://doi.o g/
10.3390/economies12100274
Academic Edi o s: Gab iela Dob o a
and Ral Fendel
Recei ed: 8 Augus 2024
Re ised: 23 Sep embe 2024
Accep ed: 2 Oc obe 2024
Published: 8 Oc obe 2024
Copy igh : © 2024 by he au ho s.
Licensee MDPI, Basel, Swi ze land.
This a icle is an open access a icle
dis ibu ed unde he e ms and
condi ions o he C ea i e Commons
A ibu ion (CC BY) license (h ps://
c ea i ecommons.o g/licenses/by/
4.0/).
economies
A icle
A Tale o Two Economies: Diach onic Compa a i e Analysis o
Di e ging Pa hs o G ow h and Inequali y in he Uni ed S a es
and he Uni ed Kingdom
Panagio is Ka oun zos 1, Nikolaos T. Giannakopoulos 2,* , Damianos P. Sakas 2and S a os P. Migkos 3
1Depa men o Regional and Economic De elopmen , School o Applied Economics and Social Sciences,
Ag icul u al Uni e si y o A hens, 118 55 A hens, G eece; panagio iska [email p o ec ed]
2
BICTEVAC Labo a o y—Business In o ma ion and Communica ion Technologies in Value Chains Labo a o y,
Depa men o Ag ibusiness and Supply Chain Managemen , School o Applied Economics and Social
Sciences, Ag icul u al Uni e si y o A hens, 118 55 A hens, G eece; [email p o ec ed]
3Depa men o Accoun ing & Finance, School o Economic Sciences, Uni e si y o Wes e n Macedonia,
501 00 Kozani, G eece; a [email p o ec ed]
*Co espondence: [email p o ec ed]; Tel.: +30-69-4001-3673
Abs ac : This s udy in es iga es he co ela ion be ween he Gini index and g oss domes ic p oduc
(GDP) in wo o he wo ld’s la ges capi alis economies: he Uni ed S a es and he Uni ed Kingdom.
U ilizing econome ic me hods, including s a iona i y es s and linea eg ession, his esea ch wo k
aims o elucida e he ela ionship be ween economic inequali y and economic g ow h. The esul s o
he Uni ed S a es e eal a signi ican posi i e co ela ion be ween GDP and he Gini index, sugges ing
ha economic g ow h is associa ed wi h ising income inequali y. In con as , he Uni ed Kingdom
shows a much weake ela ionship, indica ing ha o he ac o s, such as edis ibu i e policies
and social wel a e p og ams, may mi iga e he impac o economic g ow h on income inequali y.
These indings highligh he impo ance o na ional policies and ins i u ional amewo ks in shaping
economic ou comes and can be used in policy making. This s udy con ibu es o he exis ing li e a u e
by p o iding a compa a i e analysis o he co ela ion be ween GDP and he Gini index in wo majo
capi alis economies, o e ing esh empi ical insigh s.
Keywo ds: economic inequali y; Gini index; GDP; g ow h; compa a i e analysis; ime se ies;
eg ession analysis
1. In oduc ion
Economic inequali y has become a cen al issue in con empo a y socioeconomic
discou se, pa icula ly in ad anced capi alis economies. Inge soll (2024) claims ha
weal h and income inequali y a e inhe en and ine i able, unable o be ully e adica ed
by any economic, social, o policy in e en ions. G oss domes ic p oduc (GDP) is a
undamen al indica o o economic pe o mance, e lec ing he o al economic ou pu o a
na ion (Johnson 2024). The Gini index, a measu e o income inequali y, has been ex ensi ely
used o e alua e he dis ibu ion o income wi hin a coun y (A kinson 2015). Va ious
me hods o measu ing inequali y exis , bu he Gini index is he mos commonly used
due o i s simplici y, while po e y, inequali y, and social exclusion a e in e connec ed
issues being ac i ely add essed h ough global coope a ion and e o s o d i e poli ical
and olun a y ac ions o wa d (Halkos and Aslanidis 2023).
The p ima y objec i e o his s udy is o analyze he co ela ion be ween he Gini
index and GDP in wo o he wo ld’s la ges capi alis economies: he Uni ed S a es o
Ame ica (USA) and he Uni ed Kingdom (UK). Despi e hei economic p owess, hese
na ions exhibi signi ican dispa i ies in income dis ibu ion, making hem ideal subjec s o
his compa a i e analysis (Pike y 2014). Bo h he Uni ed S a es and he Uni ed Kingdom
Economies 2024,12, 274. h ps://doi.o g/10.3390/economies12100274 h ps://www.mdpi.com/jou nal/economies
Economies 2024,12, 274 2 o 25
a e leading economies wi h subs an ial global in luence. Thei economic policies and
pe o mance no only impac hei own popula ions bu also ha e a - eaching e ec s on
he global economy. S udying hese wo coun ies p o ides aluable insigh s in o he
dynamics o economic g ow h and income inequali y in ad anced capi alis sys ems.
The Uni ed S a es is known o i s high le els o income inequali y, which ha e been
ising o e he pas se e al decades due o echnological ad ancemen s, globaliza ion, and
policy decisions (Saez and Zucman 2016), while i is also known o i s high le els o GDP
g ow h. Resea ch by Pike y and Saez (2003) demons a es how economic g ow h in he
Uni ed S a es has disp opo iona ely bene i ed op-income ea ne s, leading o inc eased
inequali y. Au o e al. (2008) obse ed simila ends, highligh ing ha wage inequali y has
inc eased signi ican ly wi h economic g ow h, especially bene i ing high-income g oups.
Che y e al. (2014) u he explo ed he limi ed in e gene a ional mobili y in he US,
showing how economic oppo uni ies a e no equally dis ibu ed. Mishel and Bi ens
(2017) a gued ha echnological ad ancemen s exace ba e wage dispa i ies, con ibu ing
o o e all inequali y. Addi ionally, S igli z (2012) emphasized how he cu en economic
policies and ma ke s uc u es in he US ha e led o a di ided socie y whe e GDP g ow h
does no equa e o equi able weal h dis ibu ion.
In con as , he Uni ed Kingdom has implemen ed a ious social wel a e p og ams
and edis ibu i e policies aimed a educing income inequali y, ye s ill aces signi ican
challenges in his a ea. S udies ha e shown ha ax and bene i policies signi ican ly
in luence income inequali y in he UK (B ewe e al. 2013). The impac o social policies
on inequali y has been highligh ed, pa icula ly in he con ex o he economic c isis
and subsequen eco e y e o s (Hills e al. 2015). Repo s om he Ins i u e o Fiscal
S udies emphasize he ole o go e nmen policies in mi iga ing inequali y and imp o ing
li ing s anda ds (Amin-Smi h e al. 2017). These indings indica e ha while edis ibu i e
policies and social wel a e p og ams can mi iga e he impac o economic g ow h on income
inequali y, he Uni ed Kingdom s ill expe iences signi ican dispa i ies ha equi e ongoing
a en ion and a ge ed in e en ions.
The di e gen policy app oaches o he Uni ed S a es and he Uni ed Kingdom owa ds
economic g ow h and income dis ibu ion o e a unique oppo uni y o compa e and
con as hei impac s. The US ends o a o ma ke -o ien ed policies wi h less emphasis
on edis ibu ion (Lindh and McCall 2022), whe eas he UK has a mo e obus wel a e
s a e and ac i ely pu sues edis ibu i e measu es (Taylo -Gooby and La sen 2004). This
compa ison can shed ligh on he e ec i eness o di e en policy amewo ks in managing
income inequali y.
Addi ionally, bo h coun ies main ain comp ehensi e and publicly accessible eco-
nomic da a, allowing o a de ailed and igo ous econome ic analysis. The a ailabili y o
long- e m da a on GDP and he Gini index acili a es a ho ough in es iga ion o ends
and ela ionships o e ime. The socio-poli ical con ex s o he Uni ed S a es and he Uni ed
Kingdom also play a c ucial ole in hei economic dynamics. The poli ical clima e, public
a i udes owa d inequali y, and his o ical de elopmen s in luence how each coun y ad-
d esses economic dispa i y. Compa ing hese con ex s can p o ide a deepe unde s anding
o he in e play be ween economic policies and social ou comes. By ocusing on hese
wo majo economies, his s udy aims o con ibu e o he exis ing li e a u e wi h esh
empi ical e idence and pe spec i es. The indings can in o m policymake s, economis s,
and esea che s abou he implica ions o economic g ow h o income inequali y and help
design mo e e ec i e s a egies o p omo e equi able g ow h.
Unde s anding he ela ionship be ween economic g ow h and income inequali y is
c ucial o o mula ing e ec i e economic policies. A posi i e co ela ion be ween GDP
and he Gini index may sugges ha economic g ow h is accompanied by inc easing
income dispa i y, a phenomenon ha could ha e p o ound socioeconomic implica ions
(
S igli z 2012
). This s udy aims o p o ide insigh s ha can help policymake s o balance
economic g ow h wi h equi able income dis ibu ion.
Economies 2024,12, 274 3 o 25
While nume ous s udies ha e examined he ela ionship be ween economic g ow h
and income inequali y, his esea ch is dis inc i e in i s compa a i e app oach, ocusing
speci ically on he Uni ed S a es and he Uni ed Kingdom. By analyzing hese wo majo
capi alis economies, his s udy seeks o con ibu e o he exis ing li e a u e wi h esh pe -
spec i es and empi ical e idence. This s udy aims o empi ically in es iga e he co ela ion
be ween he Gini index and GDP in he Uni ed S a es and he Uni ed Kingdom om a
compa a i e pe spec i e. By employing igo ous econome ic echniques, his esea ch
in ends o elucida e whe he economic g ow h in hese coun ies is associa ed wi h changes
in income inequali y.
This s udy hypo hesizes ha he Uni ed Kingdom and he Uni ed S a es di e sig-
ni ican ly in hei ela ionship be ween economic g ow h and income inequali y due o
hei di e ing social wel a e sys ems and policy app oaches. The UK, wi h i s s onge
edis ibu i e policies and social wel a e p og ams, is expec ed o show a weake co e-
la ion be ween GDP g ow h and ising income inequali y compa ed o he US, whe e a
mo e ma ke -o ien ed and neolibe al app oach may lead o a s onge connec ion be ween
economic g ow h and inequali y.
Ou esea ch demons a es he signi ican posi i e co ela ion be ween GDP and he
Gini index in he Uni ed S a es, sugges ing ha economic g ow h is associa ed wi h ising
income inequali y. In con as , he Uni ed Kingdom shows a much weake ela ionship,
indica ing ha o he ac o s, such as edis ibu i e policies, play a c i ical ole in mode a ing
his ela ionship. These indings emphasize he impo ance o conside ing na ional con ex s
and policy amewo ks when add essing economic inequali y, o e ing aluable insigh s
o policymake s aiming o balance economic g ow h wi h equi able income dis ibu ion.
The s udy is s uc u ed as ollows: Sec ion 2p o ides a de ailed o e iew o he
ele an li e a u e, highligh ing he exis ing indings on he ela ionship be ween income
inequali y and economic g ow h. In Sec ion Resea ch Gap—Resea ch Ques ion—Resea ch
Hypo heses, a e e iewing he li e a u e, he esea ch gap is iden i ied, leading o he
o mula ion o he esea ch ques ion and hypo heses. Sec ion 3ou lines he me hodology
used, including he econome ic echniques applied and he a ionale behind he selec ion
o he da a and me hods. Sec ion 4p esen s he esul s, wi h a compa a i e analysis o he
Uni ed S a es and he Uni ed Kingdom, ocusing on he ela ionship be ween GDP and
income inequali y. Finally, Sec ion 5discusses he implica ions o hese indings, emphasiz-
ing he di e ences in policy amewo ks and hei po en ial in luence on income inequali y,
while Sec ion 6o e s concluding ema ks and sugges s a eas o u he esea ch.
2. Li e a u e Re iew
Theo e ical pe spec i es on inequali y ha e e ol ed. Classical economis s like Smi h
(2002) and Rica do (1821) ecognized he po en ial o he unequal dis ibu ion o weal h
bu we e gene ally op imis ic abou he sel -co ec ing na u e o ma ke s. Ma x (1993),
howe e , a gued ha capi alism inhe en ly leads o inc easing inequali y and social con lic .
Con empo a y heo ies emphasize he ole o ins i u ions and powe dynamics in shaping
inequali y (Robinson and Acemoglu 2012). The wo k o No h (1990) and Olson (2022)
highligh s how ins i u ional amewo ks can ei he mi iga e o exace ba e inequali y.
Se e al s udies ha e explo ed he ela ionship be ween GDP and income inequali y.
Kuzne s (1955) hypo hesized an in e ed U-shaped ela ionship, sugges ing ha inequal-
i y ini ially inc eases wi h economic g ow h, bu e en ually dec eases. This hypo hesis,
known as he Kuzne s cu e, has been es ed in a ious con ex s wi h mixed esul s
(Acemoglu e al. 2002;Ba o 2000).
Pike y (2014) a gues ha in he long un, he a e o e u n on capi al exceeds he
a e o economic g ow h, leading o inc easing inequali y. This asse ion has been sup-
po ed by empi ical e idence om mul iple s udies (Saez and Zucman 2016;S igli z 2012).
S igli z (2016
), u he con ends ha inequali y is no jus a byp oduc o economic o ces
bu is also in luenced by policies and ins i u ional amewo ks.
Economies 2024,12, 274 4 o 25
Resea ch by Wilkinson and Picke (2010) indica es ha highe income inequali y is
associa ed wi h a ious social p oblems, including poo heal h ou comes and lowe le els
o us . They a gue ha mo e equal socie ies end o ha e be e social cohesion and
o e all well-being.
K ugman (2012) emphasizes ha economic policies play a c ucial ole in shaping
income dis ibu ion. He a gues ha p og essi e axa ion and social sa e y ne s can mi iga e
he ad e se e ec s o inequali y. Simila ly, Dea on (2024) poin s ou ha add essing
inequali y equi es a mul i ace ed app oach, including educa ion and heal hca e e o ms.
Technological change has also been iden i ied as a signi ican d i e o inequali y.
Au o e al. (2013) show ha echnological ad ancemen s ha e disp opo iona ely bene i ed
high-skilled wo ke s, leading o a widening income gap. Goldin and Ka z (2009) simila ly
highligh he ole o educa ion in media ing he e ec s o echnological change on inequali y.
Se e al c oss-coun y s udies ha e examined he impac o globaliza ion on income
inequali y. Jaumo e e al. (2013) ind ha while globaliza ion has con ibu ed o economic
g ow h, i has also exace ba ed income dispa i ies in many coun ies. This is co obo a ed
by he wo k o Milano ic (2016), who documen s he di e gen e ec s o globaliza ion on
di e en segmen s o he popula ion.
In he con ex o he Uni ed S a es and he Uni ed Kingdom, se e al s udies ha e
documen ed ising income inequali y o e he pas ew decades (Au o 2014;Blundell
and E he idge 2010). The inc easing concen a ion o weal h a he op o he income
dis ibu ion has been highligh ed as a signi ican conce n (Che y e al. 2014;K uege 2012).
McGo e n e al.’s (2023) s udy examined he co e age o ising income inequali y
in majo UK and US newspape s om 1990 o 2015, inding ha while media a en ion
on he issue inc eased, especially a e he 2008 inancial c isis, he aming shi ed om
concep ualizing inequali y o managing i h ough policy, leading o a mo e pola ized and
mo alized deba e, ye wi hou spa king widesp ead public ou age.
In compa ing he Uni ed S a es and he Uni ed Kingdom, Ho mann e al. (2020) ound
ha while income inequali y has inc eased in bo h coun ies since he 1980s, he g ow h in
inequali y has been d i en by di e en ac o s. In he Uni ed S a es, labo income inequali y
has been he p ima y d i e , wi h capi al income playing an inc easing ole in mo e ecen
yea s, pa icula ly o high-income indi iduals. This s udy highligh s ha educa ion has
signi ican ly con ibu ed o he g owing inequali y in he US, as ising e u ns on educa ion
ha e widened he income gap be ween high- and low-educa ed wo ke s. By con as , in
he Uni ed Kingdom, he ole o educa ion in inequali y g ow h has been less p onounced,
wi h e u ns on educa ion emaining ela i ely s able in ecen yea s. Howe e , simila o
he US, ising labo income inequali y has been a signi ican ac o in he o e all inc ease in
income dispa i ies. Despi e hese ends, he UK’s mo e comp ehensi e wel a e sys em has
helped o cushion he impac o income inequali y compa ed o he US, whe e he weake
sa e y ne has exace ba ed income dispa i ies.
Policy esponses o inequali y ha e a ied ac oss coun ies. The No dic coun ies, o
example, ha e managed o main ain ela i ely low le els o inequali y h ough comp ehen-
si e wel a e s a es and ac i e labo ma ke policies (Esping-Ande sen 1990). In con as ,
he Uni ed S a es and he Uni ed Kingdom ha e expe ienced highe le els o inequali y,
pa ly due o implemen ing ewe edis ibu i e policies (Kenwo hy and Pon usson 2005).
The ela ionship be ween economic g ow h and inequali y emains complex and
con ex -dependen . While some s udies ind ha economic g ow h can educe inequali y in
he long un (Dolla and K aay 2002;Kuzne s 2019;Shin 2012;Seo e al. 2020), o he s a gue
ha g ow h o en exace ba es income dispa i ies (Bou guignon 2004;
Mallick e al. 2020
;
S igli z 2016).
Acco ding o Sakaki (2019), in ma ke economies, income inequali y gene ally ollows
h ee pa e ns—high (Uni ed S a es, Uni ed Kingdom, Japan), low (No he n Eu ope), and
medium Gini coe icien le els—while he ela ionship be ween income dis ibu ion and
social wel a e poses a challenging issue in economics.
Economies 2024,12, 274 5 o 25
Blundell e al. (2018) ound ha in he Uni ed Kingdom, while he inequali y o males’
ea nings has inc eased o e ecen decades, ne amily income inequali y has emained
ela i ely s able due o he e ec i eness o edis ibu i e policies, including expanded
wel a e p og ams and ax c edi s, which ha e mi iga ed he impac o wage dispa i ies. In
con as , he Uni ed S a es has expe ienced signi ican inc eases in bo h ea nings and ne
income inequali y, d i en by a weake social sa e y ne and less e ec i e ax and wel a e
sys ems. As a esul , income inequali y has g own sha ply in he US, pa icula ly o
lowe -income households, wi h ewe policy in e en ions o coun e balance he e ec s o
ising wage inequali y. This compa ison unde sco es he c ucial ole o policy di e ences
in shaping income dis ibu ion in each coun y.
Chancel e al. (2017) claim ha bo h he Uni ed S a es and he Uni ed Kingdom ha e
commi ed o achie ing he Sus ainable De elopmen Goals (SDGs), pa icula ly SDG 10,
which ocuses on educing inequali y. The Uni ed Kingdom has made mo e p og ess, wi h
i s s onge edis ibu i e policies and wel a e sys ems helping o mi iga e ising income
inequali y, aligning mo e closely wi h SDG 10’s a ge s o inclusi e g ow h. In con as ,
he Uni ed S a es has aced g ea e challenges due o weake social sa e y ne s and ising
inequali y d i en by bo h labo and capi al income concen a ion. Despi e i s commi men
o SDG 10, he US con inues o s uggle wi h implemen ing e ec i e policies o educe
inequali y, highligh ing he need o signi ican e o ms in axa ion, wel a e, and labo
ma ke s o achie e sus ainable de elopmen .
Resea ch Gap—Resea ch Ques ion—Resea ch Hypo heses
Despi e a subs an ial body o esea ch, a gap pe sis s in he compa a i e analysis o he
ela ionship be ween GDP and he Gini index in majo capi alis economies like he Uni ed
S a es and he Uni ed Kingdom. While indi idual s udies ha e explo ed hese a iables
wi hin each coun y, a consis en , c oss-coun y compa ison has been lacking. This s udy
seeks o b idge ha gap by o e ing a compa a i e analysis o he co ela ion be ween GDP
and he Gini index in bo h na ions, employing igo ous econome ic echniques o p o ide
esh empi ical insigh s. A e a comp ehensi e e iew o he li e a u e, his s udy iden i ies
a need o unde s and how income inequali y, as measu ed by he Gini index, co ela es
wi h GDP in hese wo coun ies, leading o he o mula ion o he esea ch ques ion and
hypo heses as ollows:
Resea ch Ques ion (RQ):
How do GDP and income inequali y, as measu ed by he Gini index, in e ac in he Uni ed
S a es and he Uni ed Kingdom, and a e he e signi ican di e ences be ween hese wo economies?
Resea ch Hypo heses o he Uni ed Kingdom:
(H0): The e is no signi ican posi i e co ela ion be ween GDP and he Gini index in he Uni ed
Kingdom. Speci ically, changes in GDP do no signi ican ly p edic changes in income inequali y.
(H1): The e is a signi ican posi i e co ela ion be ween GDP and he Gini index in he Uni ed
Kingdom. Speci ically, as GDP inc eases, income inequali y also ises.
Resea ch Hypo heses o he Uni ed S a es:
(H0): The e is no signi ican posi i e co ela ion be ween GDP and he Gini index in he Uni ed
S a es. Speci ically, changes in GDP do no signi ican ly p edic changes in income inequali y.
(H1): The e is a signi ican posi i e co ela ion be ween GDP and he Gini index in he Uni ed
S a es. Speci ically, as GDP inc eases, income inequali y also ises.
3. Me hodology
3.1. Da a
The da a o his s udy we e ob ained om he Wo ld Bank (2024c) da abase. This
da ase consis s o annual obse a ions o he Gini index and g oss domes ic p oduc (GDP)
o he Uni ed S a es and he Uni ed Kingdom, co e ing he pe iod om 1968 o 2021. The
Economies 2024,12, 274 6 o 25
Wo ld Bank was chosen as he sou ce o hese da a due o i s epu a ion o p o iding
comp ehensi e, eliable, and globally s anda dized economic s a is ics. The Wo ld Bank
compiles da a om na ional s a is ical o ices and o he c edible in e na ional sou ces,
ensu ing accu acy and consis ency ac oss coun ies and pe iods. By elying on da a om
such a us ed ins i u ion, his s udy ensu ed he alidi y and obus ness o i s analysis,
enhancing he c edibili y o i s indings.
The yea s 1968 o 2021 we e selec ed o his s udy because hey ep esen he pe iod
o which consis en and compa able da a a e a ailable o bo h he Uni ed S a es and he
Uni ed Kingdom, speci ically ega ding he Gini index and GDP. This ime ame p o ided
a long- e m pe spec i e, allowing us o cap u e signi ican economic and policy shi s
in bo h coun ies, such as pe iods o economic g ow h, ecessions, and changes in social
and iscal policies. Using his common ime ange ensu ed ha he analysis emained
consis en ac oss bo h na ions, enabling a obus compa a i e s udy o income inequali y
and economic g ow h. The a ailabili y o eliable and s anda dized da a o bo h a iables
du ing hese yea s enhanced he alidi y o he indings and allowed o meaning ul
c oss-coun y compa isons.
Acco ding o he Wo ld Bank (2024a,2024b), he Gini index quan i ies how income (o ,
in ce ain cases, consump ion expendi u e) is dis ibu ed among indi iduals o households
wi hin an economy, compa ing i o a si ua ion o pe ec equali y. I u ilizes he Lo enz
cu e, which illus a es he cumula i e dis ibu ion o income ela i e o he popula ion,
s a ing om he lowes ea ne s. The Gini index e lec s he a ea be ween he Lo enz cu e
and an ideal line o o al equali y, as a pe cen age o he o al a ea unde ha line. A Gini
sco e o 0 indica es comple e equali y, while 100 signi ies absolu e inequali y. The g oss
domes ic p oduc (GDP) is he o al alue added by all p oduce s wi hin an economy,
including p oduc axes and excluding any subsidies no ac o ed in o p oduc alues. I is
calcula ed wi hou accoun ing o he dep ecia ion o physical asse s o he deple ion and
deg ada ion o na u al esou ces. The da a a e p esen ed in cons an local cu ency e ms.
Addi ionally, he UK’s GDP is epo ed in billions o GBP, while he US’s GDP is p esen ed
in billions o USD.
The selec ion o he Gini index and GDP o his s udy was based on hei widesp ead
use as s anda d measu es o assess economic inequali y and o e all economic pe o mance,
espec i ely. The Gini index is a well-es ablished me ic o e alua ing income inequali y,
cap u ing he dispa i y in income dis ibu ion ac oss a popula ion. I p o ides a quan i a i e
basis o compa e inequali y bo h wi hin and be ween coun ies. Simila ly, GDP is a co e
indica o o economic ou pu , e lec ing he o al alue o goods and se ices p oduced
in an economy. I is undamen al o unde s anding economic g ow h and pe o mance
o e ime.
A combina ion o he Gini index and GDP was selec ed o his s udy o explo e he
ela ionship be ween economic g ow h and income inequali y, which a e wo c i ical dimen-
sions o socioeconomic well-being. While GDP measu es he o e all economic pe o mance
o a coun y, i does no cap u e how he bene i s o ha g ow h a e dis ibu ed among he
popula ion. The Gini index, on he o he hand, speci ically quan i ies income inequali y,
e ealing he ex en o which economic g ow h is sha ed ac oss di e en income g oups.
By examining bo h a iables oge he , we can in es iga e whe he a highe economic
ou pu (as measu ed by GDP) is associa ed wi h g ea e income inequali y (as e lec ed
by he Gini index). This ela ionship is pa icula ly impo an in he con ex o ad anced
economies, whe e ising GDP may coincide wi h inc easing inequali y, as seen in a ious
empi ical s udies. Unde s anding his dynamic is c ucial o policymake s aiming o
balance economic g ow h wi h inclusi e de elopmen , ensu ing ha he bene i s o g ow h
a e mo e equi ably dis ibu ed.
In he cu en esea ch, da a p ocessing and s a is ical analysis we e ca ied ou using
SPSS and R p og amming so wa e. These ools we e applied o ensu e a igo ous and
accu a e analysis o he ime se ies da a, wi h econome ic me hods such as s a iona i y
es s and linea eg ession being u ilized. The combina ion o SPSS and R acili a ed obus
Economies 2024,12, 274 7 o 25
handling o he da ase s, allowing o a comp ehensi e explo a ion o he ela ionships
be ween economic g ow h and income inequali y in bo h coun ies.
3.2. Me hod
In his s udy, a comp ehensi e sui e o s a is ical me hods was employed o igo ously
analyze he ela ionship be ween GDP and he Gini index o he Uni ed S a es and he
Uni ed Kingdom. S a iona i y es s we e i s conduc ed on he ime se ies da a o ensu e
he alidi y o subsequen analyses. The Augmen ed Dickey–Fulle (ADF) es and he
Kwia kowski–Phillips–Schmid –Shin (KPSS) es we e applied o de e mine whe he he
da a se ies we e s a iona y. I non-s a iona i y was de ec ed, di e encing was applied o
ans o m he se ies in o hei s a iona y o ms, wi h a ocus on he i s di e enced a iables.
A e he s a iona i y es s and necessa y ans o ma ions, linea eg ession analysis
was conduc ed o explo e he co ela ion be ween he di e enced GDP and he Gini
index. The eg ession analysis was used o e alua e he esea ch hypo heses, enabling he
quan i ica ion o he ela ionship and p o iding insigh s in o how changes in economic
g ow h a ec income inequali y in each coun y.
Linea eg ession was selec ed as he esea ch me hod o his s udy due o i s e ec-
i eness in analyzing he ela ionship be ween a dependen a iable ( he Gini index) and
an independen a iable (GDP). This me hod p o ided a clea and quan i iable way o
unde s and how changes in GDP, a measu e o economic g ow h, impac income inequali y
as measu ed by he Gini index.
Linea eg ession was pa icula ly sui able o his s udy because i p o ides a s aigh -
o wa d in e p e a ion o he ela ionship be ween wo a iables. I quan i ies he s eng h
and di ec ion o he associa ion, helping o de e mine whe he GDP g ow h leads o
inc eases o dec eases in income inequali y. Addi ionally, linea eg ession allows o
s a is ical es ing o he signi icance o he ela ionship, p o iding insigh s in o whe he he
obse ed co ela ion be ween GDP and he Gini index is s a is ically meaning ul o due o
andom chance.
Fu he mo e, linea eg ession is widely used in economic s udies and is suppo ed by
obus s a is ical echniques, making i a eliable and well-es ablished me hod o examining
he impac o one a iable on ano he . I also accommoda es he analysis o long- e m da a,
such as he 1968–2021 pe iod in his s udy, and allows o adjus men s (such as di e encing
da a) o handle po en ial issues like non-s a iona i y. O e all, i s simplici y, in e p e abili y,
and abili y o p oduce s a is ically signi ican esul s make linea eg ession an app op ia e
and e ec i e choice o his esea ch.
In linea eg ession analysis, he ela ionship be ween a dependen a iable Y and one
o mo e independen a iables X is modeled using a linea equa ion. Fo his s udy, whe e
he dependen a iable is he Gini index (measu ing income inequali y) and he indepen-
den a iable is GDP, he linea eg ession model can be exp essed ma hema ically as
Y = β0 + β1X + ε(1)
whe e:
Y = Gini index (dependen a iable);
X = GDP (independen a iable);
β0 = in e cep ( he alue o Y when X is ze o);
β1 = slope ( he change in Y o a one-uni change in X);
ε= e o e m (cap u es he a ia ion in Y ha canno be explained by X).
The eg ession coe icien
β
1 ep esen s he s eng h and di ec ion o he ela ionship
be ween GDP and he Gini index. A posi i e
β
1 sugges s ha as GDP inc eases, income
inequali y also inc eases, while a nega i e
β
1 would indica e ha highe GDP is associa ed
wi h lowe inequali y.
The model Gini =
β
0 +
β
1GDP +
ε
allowed us o es whe he GDP signi ican ly
p edic s changes in he Gini index ac oss he gi en da ase o he wo coun ies. The
Economies 2024,12, 274 8 o 25
me hodology o ou analysis began wi h he p esen a ion o desc ip i e s a is ics o he
di e enced da a o he a iables unde s udy, speci ically g oss domes ic p oduc (GDP) and
he Gini index. This s ep p o ided a undamen al unde s anding o he da ase , including
alues such as he mean, s anda d de ia ion, minimum, and maximum o each a iable.
Following he desc ip i e s a is ics, he eg ession model summa y was examined.
Key s a is ics such as R ( he co ela ion coe icien ) we e used o indica e he s eng h o
he ela ionship be ween he a iables. The R-squa ed alue showed he pe cen age o
he a iance in he dependen a iable (Gini) ha can be explained by he independen
a iable (GDP). The adjus ed R-squa ed alue was also p o ided, o e ing a mo e accu a e
measu e ha accoun s o he numbe o p edic o s in he model. The s anda d e o o he
es ima e indica ed how closely he model’s p edic ions ma ch he ac ual da a. Addi ionally,
he Du bin–Wa son s a is ic was used o check o au oco ela ion in he esiduals.
Nex , ANOVA (analysis o a iance) was pe o med, p esen ing alues such as he
sum o squa es, deg ees o eedom (d ), mean squa e, F-s a is ic, and signi icance (Sig.).
The F-s a is ic was used o assess whe he he eg ession model was s a is ically signi ican ,
while he p- alue (Sig.) de e mined i he ela ionship be ween GDP and he Gini index is
s a is ically meaning ul.
Then, he eg ession coe icien s we e analyzed, showing bo h uns anda dized and
s anda dized coe icien s. The uns anda dized coe icien (B) indica ed how much he
dependen a iable (Gini index) changes o each uni change in he independen a iable
(GDP). The - alues and p- alues o each coe icien we e also p o ided o assess hei
s a is ical signi icance. A e wa d, he collinea i y diagnos ics we e e iewed o ensu e ha
he e was no collinea i y be ween he independen a iables, meaning ha he a iables
we e no excessi ely co ela ed wi h each o he , which could comp omise he alidi y o
he model.
The nex s ep was he analysis o eg ession esidual s a is ics, whe e esiduals ( he
di e ences be ween obse ed and p edic ed alues) we e examined o con i m ha hey
we e no mally dis ibu ed and o check o any issues in he model. Finally, a sca e plo
was p esen ed o illus a e he ela ionship be ween di e enced GDP and di e enced Gini.
This isual ep esen a ion helped o cla i y he na u e o he ela ionship be ween he wo
a iables. Following hese s eps, he analysis mo ed on o es he esea ch hypo heses
based on he esul s ob ained om he eg ession model.
The analyses p esen ed in his s udy a e essen ial o unde s anding he ela ionship
be ween GDP and income inequali y in wo majo economies, he Uni ed S a es and
he Uni ed Kingdom. Each analysis se es a speci ic pu pose in es ing he esea ch
hypo heses and alida ing he indings. Fi s , desc ip i e s a is ics p o ide a ounda ional
unde s anding o he da a, o e ing insigh s in o he a iabili y o GDP and he Gini index.
The s a iona i y es s ensu e he eliabili y o ime-se ies da a, making su e ha he esul s
a e no skewed by non-s a iona y ends. The eg ession analysis, including key s a is ical
measu es such as R-squa ed, ANOVA, and coe icien s, di ec ly add esses he co e esea ch
ques ion by quan i ying he ela ionship be ween economic g ow h and income inequali y.
Wi hou hese c i ical analyses, i would be impossible o de e mine whe he GDP g ow h
signi ican ly in luences income inequali y in ei he coun y. Addi ionally, diagnos ics such
as collinea i y checks and esiduals ensu e he obus ness o he models, alida ing he
in eg i y o he esul s. Thus, each componen o he analysis is necessa y o p o ide a
comp ehensi e, scien i ically igo ous unde s anding o he dynamics be ween GDP and
income inequali y, o e ing clea alue o bo h academic discou se and policy making.
4. Resul s
4.1. S a iona i y Tes s
The ollowing igu es p o ide a p elimina y depic ion o he ends in GDP and he
Gini index o e ime o he Uni ed Kingdom and he Uni ed S a es. These ini ial plo s
se e as a i s imp ession o he ime se ies, showcasing how economic g ow h (GDP)
and income inequali y (Gini index) ha e e ol ed in hese wo majo economies. Figu e 1
Economies 2024,12, 274 15 o 25
o he esiduals, he mean squa es a e 0.087 and 0.856, espec i ely. The F-s a is ic is 0.102,
and he signi icance (p- alue) is 0.751, which is much g ea e han he common signi icance
le el o 0.05. This high p- alue indica es ha we ail o ejec hypo hesis H0, sugges ing ha
changes in GDP do no signi ican ly p edic changes in he Gini coe icien . Consequen ly,
he eg ession model does no demons a e a signi ican impac o GDP changes on income
inequali y o he da a analyzed.
Table 8. Uni ed Kingdom eg ession and esiduals summa y.
Sum o Squa es d
Mean Squa e
F Sig.
Reg ession 0.087 1 0.087 0.102 0.751
Residual 43.641 51 0.856 - -
To al 43.728 52 - - -
Table 9p o ides coe icien s om he eg ession analysis, including bo h uns an-
da dized and s anda dized coe icien s, along wi h hei s anda d e o s, - alues, and
signi icance le els. The in e cep (cons an ) has an uns anda dized coe icien (B) o 0.083
wi h a s anda d e o o 0.146, esul ing in a - alue o 0.570 and a signi icance (p- alue)
o 0.571. This high p- alue indica es ha he in e cep is no signi ican ly di e en om
ze o, sugges ing i does no ha e a meaning ul baseline le el in his con ex . Fo he UK’s
GDP (di e enced), he uns anda dized coe icien is 8.966
×
10
−13
wi h a s anda d e o
o 0.000 and a s anda dized coe icien (Be a) o 0.045. The - alue is 0.319 wi h a signi i-
cance (p- alue) o 0.751. These alues indica e a e y weak posi i e ela ionship be ween
GDP and he Gini index; howe e , he high p- alue sugges s ha his ela ionship is no
s a is ically signi ican . The e o e, changes in GDP do no signi ican ly p edic changes in
income inequali y o he Uni ed Kingdom. O e all, he coe icien s indica e no signi ican
ela ionship be ween he di e enced GDP and he di e enced Gini index o he Uni ed
Kingdom, wi h high p- alues o bo h he in e cep and he GDP coe icien sugges ing
ha nei he con ibu es meaning ully o p edic ing changes in income inequali y in his
eg ession model.
Table 9. Uni ed Kingdom eg ession coe icien s.
Uns anda dized
Coe icien s
S anda dized
Coe icien s Sig.
B S d. E o Be a
(Cons an ) 0.083 0.146 0.570 0.571
UK GDP 8.966 ×10−13 0.000 0.045 0.319 0.751
Table 10 p o ides diagnos ic measu es o mul icollinea i y in he eg ession analysis.
The eigen alue and condi ion index a e used o assess he p esence o mul icollinea i y
among he p edic o s. An eigen alue close o ze o indica es po en ial mul icollinea i y,
while a high condi ion index (g ea e han 15 o 30) sugges s se e e mul icollinea i y. In
his case, he condi ion indices a e 1.000 and 1.705, bo h well below he h eshold indica ing
no se e e mul icollinea i y. The a iance p opo ions show how he a iance o each
coe icien is dis ibu ed ac oss he di e en dimensions. Fo bo h he cons an and he
UK’s GDP, he a iance p opo ions a e 0.26 and 0.74 o he wo componen s, espec i ely.
These esul s sugges ha he e is no signi ican mul icollinea i y a ec ing he eg ession
model, as he condi ion indices a e low and he a iance p opo ions a e e enly dis ibu ed,
ensu ing he s abili y and eliabili y o he eg ession coe icien s.
The esidual s a is ics (see Table 11) indica e ha he p edic ed alues o he di e enced
Gini index ange om
−
0.109 o 0.227, wi h a mean o 0.105 and a s anda d de ia ion
o 0.040. The esiduals, which ep esen he di e ences be ween obse ed and p edic ed
alues, ange om
−
2.107 o 2.209, wi h a mean o ze o and a s anda d de ia ion o
0.916, sugges ing hey a e cen e ed a ound he eg ession line. The s anda dized p edic ed
Economies 2024,12, 274 16 o 25
alues ha e a mean o ze o and a s anda d de ia ion o one, acili a ing easie compa ison.
Simila ly, he s anda dized esiduals ha e a mean o ze o and a s anda d de ia ion close
o one (0.990), indica ing a oughly no mal dis ibu ion. These s a is ics sugges ha he
model’s esiduals a e app op ia ely dis ibu ed, suppo ing he assump ion o no mali y in
eg ession analysis.
Table 10. Uni ed Kingdom eg ession collinea i y diagnos ics.
Eigen alue Condi ion Index
Va iance P opo ions
(Cons an ) UK GDP
1.488 1.000 0.260 0.260
0.512 1.705 0.740 0.740
Table 11. Uni ed Kingdom eg ession esiduals s a is ics.
Min Max Mean S d. De ia ion N
P edic ed
Value −0.109 0.227 0.105 0.040 53
Residual −2.107 2.209 0.000 0.916 53
S d. P edic ed Value −5.239 2.962 0.000 1.000 53
S d. Residual −2.278 2.389 0.000 0.990 53
Figu e 5shows he sca e o di e enced GDP e sus di e enced Gini, along wi h a
eg ession line. The sca e ed poin s and he nea ly ho izon al eg ession line indica e a
weak o nonexis en ela ionship be ween he wo a iables.
Economies 2024, 12, x FOR PEER REVIEW 17 o 25
Figu e 5. Rela ionship be ween diffe enced GDP and diffe enced Gini o he Uni ed Kingdom.
4.3.2. Linea Reg ession o Uni ed S a es o Ame ica
The model summa y (see Table 12) o he linea eg ession analysis o he ela ion-
ship be ween GDP and he Gini index in he Uni ed S a es shows a mode a e o s ong
posi i e co ela ion (R = 0.618), indica ing ha as GDP inc eases, he Gini index also ends
o ise. The R-squa ed alue o 0.382 means ha app oxima ely 38.2% o he a iance in
he Gini index can be explained by changes in GDP, sugges ing a mode a e le el o ex-
plana o y powe . The adjus ed R-squa ed alue o 0.370 con i ms his, indica ing ha
a ound 37% o he a iance is accoun ed o a e adjus ing o he numbe o p edic o s.
The s anda d e o o he es ima e is 0.608, sugges ing easonably accu a e model p edic-
ions. The Du bin–Wa son s a is ic o 1.831 indica es li le o no au oco ela ion in he e-
siduals. O e all, hese esul s suppo he hypo hesis ha GDP g ow h is associa ed wi h
inc eases in income inequali y in he Uni ed S a es.
Table 12. Uni ed S a es eg ession model summa y.
R R Squa e Adjus ed R
Squa e
S d. E o o he Es i-
ma e
Du bin
–Wa son
0.618 0.382 0.370 0.608 1.831
The ANOVA esul s (see Table 13) o he linea eg ession analysis o he ela ionship
be ween GDP and he Gini index in he Uni ed S a es indica e ha he model signi ican ly
explains he a ia ion in he Gini index. The eg ession sum o squa es (11.895) is subs an-
ially highe han he esidual sum o squa es (19.251), sugges ing ha he model cap u es
a signi ican po ion o he a ia ion in he da a. Wi h deg ees o eedom o 1 o he e-
g ession and 52 o he esiduals, he mean squa e o he eg ession is 11.895, compa ed
o 0.370 o he esiduals. The high F-s a is ic (32.130) and he associa ed p- alue (0.000)
indica e ha he model is s a is ically signi ican , leading us o ejec hypo hesis H0 ha
he model does no explain he a ia ion in he Gini index. Thus, he ela ionship be ween
GDP and he Gini index is con i med o be s a is ically signi ican .
Figu e 5. Rela ionship be ween di e enced GDP and di e enced Gini o he Uni ed Kingdom.
4.3.2. Linea Reg ession o Uni ed S a es o Ame ica
The model summa y (see Table 12) o he linea eg ession analysis o he ela ionship
be ween GDP and he Gini index in he Uni ed S a es shows a mode a e o s ong posi i e
Economies 2024,12, 274 17 o 25
co ela ion (R = 0.618), indica ing ha as GDP inc eases, he Gini index also ends o ise.
The R-squa ed alue o 0.382 means ha app oxima ely 38.2% o he a iance in he Gini
index can be explained by changes in GDP, sugges ing a mode a e le el o explana o y
powe . The adjus ed R-squa ed alue o 0.370 con i ms his, indica ing ha a ound 37% o
he a iance is accoun ed o a e adjus ing o he numbe o p edic o s. The s anda d
e o o he es ima e is 0.608, sugges ing easonably accu a e model p edic ions. The
Du bin–Wa son s a is ic o 1.831 indica es li le o no au oco ela ion in he esiduals.
O e all, hese esul s suppo he hypo hesis ha GDP g ow h is associa ed wi h inc eases
in income inequali y in he Uni ed S a es.
Table 12. Uni ed S a es eg ession model summa y.
R R Squa e Adjus ed R
Squa e
S d. E o o he
Es ima e Du bin–Wa son
0.618 0.382 0.370 0.608 1.831
The ANOVA esul s (see Table 13) o he linea eg ession analysis o he ela ionship
be ween GDP and he Gini index in he Uni ed S a es indica e ha he model signi ican ly
explains he a ia ion in he Gini index. The eg ession sum o squa es (11.895) is subs an-
ially highe han he esidual sum o squa es (19.251), sugges ing ha he model cap u es
a signi ican po ion o he a ia ion in he da a. Wi h deg ees o eedom o 1 o he
eg ession and 52 o he esiduals, he mean squa e o he eg ession is 11.895, compa ed
o 0.370 o he esiduals. The high F-s a is ic (32.130) and he associa ed p- alue (0.000)
indica e ha he model is s a is ically signi ican , leading us o ejec hypo hesis H0 ha
he model does no explain he a ia ion in he Gini index. Thus, he ela ionship be ween
GDP and he Gini index is con i med o be s a is ically signi ican .
Table 13. Uni ed S a es eg ession and esiduals summa y.
Sum o Squa es d
Mean Squa e
F Sig.
Reg ession 11.895 1 11.895 32.130 0.000
Residual 19.251 52 0.370 - -
To al 31.146 53 - - -
The coe icien s in Table 14 o he linea eg ession analysis o he ela ionship be ween
GDP and he Gini index in he Uni ed S a es e eal signi ican indings (see Table 12). The
in e cep (cons an ) has an uns anda dized coe icien (B) o
−
0.234 wi h a s anda d e o o
0.106, esul ing in a - alue o
−
2.217 and a p- alue o 0.031, indica ing ha he in e cep is
signi ican ly di e en om ze o. The coe icien o GDP is 1.064
×
10
−12
, wi h a s anda d
e o o 0.000 and a s anda dized coe icien (Be a) o 0.618. The - alue o GDP is 5.668
wi h a p- alue o 0.000, showing ha GDP is a highly signi ican p edic o o he Gini index.
The posi i e s anda dized coe icien indica es a s ong posi i e ela ionship be ween GDP
and he Gini index, sugges ing ha as GDP inc eases, income inequali y also ises. These
esul s con i m hypo hesis H1, ha GDP g ow h is associa ed wi h inc eased income
inequali y in he Uni ed S a es.
Table 14. Uni ed S a es eg ession coe icien s.
Uns anda dized Coe icien s S anda dized Coe icien s
Sig.
B S d. E o Be a
(Cons an ) −0.234 0.106 −2.217 0.031
USA GDP
1.064
×
10
−12 0.000 0.618 5.668 0.000
Table 15, analyzing eigen alues and condi ion indices o he eg ession model’s
p edic o s, p o ides insigh s in o mul icollinea i y. The eigen alues a e 1.620 and 0.380,
Economies 2024,12, 274 18 o 25
wi h condi ion indices o 1.000 and 2.065, espec i ely. These low condi ion indices indica e
no se e e mul icollinea i y among he p edic o s. The a iance p opo ions o bo h he
cons an and he USA’s GDP a e 0.19 and 0.81, espec i ely, o he wo componen s. This
dis ibu ion sugges s ha he p edic o s do no su e om mul icollinea i y, ensu ing he
s abili y and eliabili y o he eg ession coe icien s. Thus, he p edic o s in he model a e
no highly co ela ed, suppo ing he alidi y o he eg ession analysis esul s.
Table 15. Uni ed S a es eg ession collinea i y diagnos ics.
Eigen alue Condi ion Index
Va iance P opo ions
(Cons an ) USA GDP
1.620 1.000 0.19 0.19
0.380 2.065 0.81 0.81
The esidual s a is ics (see Table 16) p o ide de ailed in o ma ion abou he p edic ed
alues and esiduals om he eg ession analysis. The p edic ed alues o he di e enced
Gini index ange om
−
0.708 o 2.953, wi h a mean o 0.137 and a s anda d de ia ion
o 0.474, indica ing a mode a e sp ead a ound he mean. The esiduals, ep esen ing he
di e ences be ween obse ed and p edic ed alues, ange om
−
1.092 o 1.938, wi h a
mean o ze o and a s anda d de ia ion o 0.603, sugges ing ha he esiduals a e cen e ed
a ound ze o and exhibi easonable a iabili y. The s anda dized p edic ed alues ha e a
mean o ze o and a s anda d de ia ion o one, anging om
−
1.785 o 5.944, which indica es
ha he p edic ed alues a e no malized. Simila ly, he s anda dized esiduals ange om
−
1.794 o 3.184, wi h a mean o ze o and a s anda d de ia ion o 0.991, sugges ing ha
he esiduals a e app oxima ely no mally dis ibu ed. These s a is ics con i m ha he
model’s esiduals a e app op ia ely dis ibu ed, suppo ing he assump ions o no mali y
and homoscedas ici y in he eg ession analysis.
Table 16. Uni ed S a es eg ession esiduals s a is ics.
Min Max Mean S d. De ia ion N
P edic ed
Value −0.708 2.953 0.137 0.473 54
Residual −1.091 1.937 0.0000 0.602 54
S d. P edic ed Value −1.785 5.944 0.000 1.000 54
S d. Residual −1.794 3.184 0.000 0.991 54
Figu e 6shows he sca e o di e enced GDP e sus di e enced Gini, along wi h a
eg ession line. The upwa d slope o he eg ession line sugges s a posi i e ela ionship
be ween di e enced GDP and di e enced Gini, indica ing ha inc eases in GDP a e
associa ed wi h inc eases in income inequali y
4.4. E alua ion o Resea ch Hypo heses
Based on he esul s o he eg ession analysis o he Uni ed Kingdom, he esea ch
hypo hesis ha he e is a signi ican posi i e co ela ion be ween GDP and he Gini index
is ejec ed. The eg ession model yielded an R-squa ed alue o 0.002, indica ing ha
only 0.2% o he a iance in he Gini index can be explained by changes in GDP. The
F-s a is ic o 0.102 and he co esponding p- alue o 0.751 u he con i m ha he model is
no s a is ically signi ican . Addi ionally, he coe icien o GDP was 8.966
×
10
−13
wi h a
high p- alue o 0.751, indica ing ha GDP is no a signi ican p edic o o he Gini index.
These esul s sugges ha changes in GDP do no signi ican ly impac income inequali y in
he Uni ed Kingdom, leading o he ejec ion o hypo hesis H1 and he accep ance o he
hypo hesis H0.
Economies 2024,12, 274 19 o 25
Economies 2024, 12, x FOR PEER REVIEW 19 o 25
Table 16. Uni ed S a es eg ession esiduals s a is ics.
Min Max Mean S d.
De ia ion N
P edic ed
Value −0.708 2.953 0.137 0.473 54
Residual −1.091 1.937 0.0000 0.602 54
S d. P edic ed Value −1.785 5.944 0.000 1.000 54
S d. Residual −1.794 3.184 0.000 0.991 54
Figu e 6 shows he sca e o diffe enced GDP e sus diffe enced Gini, along wi h a
eg ession line. The upwa d slope o he eg ession line sugges s a posi i e ela ionship
be ween diffe enced GDP and diffe enced Gini, indica ing ha inc eases in GDP a e asso-
cia ed wi h inc eases in income inequali y
Figu e 6. Rela ionship be ween diffe enced GDP and diffe enced Gini o he Uni ed S a es.
4.4. E alua ion o Resea ch Hypo heses
Based on he esul s o he eg ession analysis o he Uni ed Kingdom, he esea ch
hypo hesis ha he e is a signi ican posi i e co ela ion be ween GDP and he Gini index
is ejec ed. The eg ession model yielded an R-squa ed alue o 0.002, indica ing ha only
0.2% o he a iance in he Gini index can be explained by changes in GDP. The F-s a is ic
o 0.102 and he co esponding p- alue o 0.751 u he con i m ha he model is no s a-
is ically signi ican . Addi ionally, he coefficien o GDP was 8.966 × 10
−13
wi h a high p-
alue o 0.751, indica ing ha GDP is no a signi ican p edic o o he Gini index. These
esul s sugges ha changes in GDP do no signi ican ly impac income inequali y in he
Uni ed Kingdom, leading o he ejec ion o hypo hesis H1 and he accep ance o he hy-
po hesis H0.
Fo he Uni ed S a es, he eg ession analysis suppo s he esea ch hypo hesis ha
he e is a signi ican posi i e co ela ion be ween GDP and he Gini index. The model
showed an R-squa ed alue o 0.382, meaning ha 38.2% o he a iance in he Gini index
Figu e 6. Rela ionship be ween di e enced GDP and di e enced Gini o he Uni ed S a es.
Fo he Uni ed S a es, he eg ession analysis suppo s he esea ch hypo hesis ha
he e is a signi ican posi i e co ela ion be ween GDP and he Gini index. The model
showed an R-squa ed alue o 0.382, meaning ha 38.2% o he a iance in he Gini index
can be explained by changes in GDP. The F-s a is ic o 32.130 wi h a p- alue o 0.000
indica es ha he model is highly signi ican . The coe icien o GDP was 1.064
×
10
−12
wi h a p- alue o 0.000, con i ming ha GDP is a signi ican p edic o o he Gini index.
These indings demons a e a s ong posi i e ela ionship be ween GDP g ow h and income
inequali y in he Uni ed S a es, leading o he ejec ion o hypo hesis H0 and he accep ance
o hypo hesis H1.
5. Discussion
The esul s o his s udy show no signi ican posi i e co ela ion be ween GDP and
he Gini index in he Uni ed Kingdom. The eg ession analysis esul s o he Uni ed
Kingdom indica e ha changes in GDP do no signi ican ly p edic changes in he Gini
index. The R-squa ed alue o 0.002 sugges s ha only 0.2% o he a iance in income
inequali y, as measu ed by he Gini index, can be explained by a ia ions in GDP. This
ex emely low explana o y powe indica es ha o he ac o s, no cap u ed by GDP alone,
likely d i e changes in income inequali y. The high p- alue (0.751) o he F-s a is ic and
he GDP coe icien u he con i ms ha he ela ionship be ween GDP and he Gini index
is no s a is ically signi ican . These indings lead o he ejec ion o hypo hesis H1 and
accep ance o hypo hesis H1, indica ing no signi ican posi i e co ela ion be ween GDP
and he Gini index in he Uni ed Kingdom. This esul may e lec he complexi y o income
inequali y dynamics in he UK, whe e o he economic, social, and policy ac o s play a
mo e subs an ial ole han GDP alone.
This inding is consis en wi h simila s udies ha highligh he complex and mul i-
ace ed na u e o income inequali y in he UK. Fo ins ance, B ewe and W en-Lewis (2016)
ound ha income inequali y in he UK is in luenced mo e by ax and bene i policies, labo
ma ke changes, and educa ional dispa i ies a he han GDP g ow h alone. Thei s udy
concluded ha he e ec s o economic g ow h on income dis ibu ion a e mi iga ed by
hese ac o s.
Economies 2024,12, 274 20 o 25
In con as , he eg ession analysis o he Uni ed S a es suppo s he hypo hesis ha
he e is a signi ican posi i e co ela ion be ween GDP and he Gini index. The model’s
R-squa ed alue o 0.382 indica es ha 38.2% o he a iance in he Gini index can be
explained by changes in GDP, sugges ing a mode a e explana o y powe . The F-s a is ic o
32.130 and i s co esponding p- alue o 0.000 highligh he model’s s a is ical signi icance.
Addi ionally, he GDP coe icien ’s p- alue o 0.000 con i ms ha GDP is a highly signi ican
p edic o o he Gini index. These esul s suppo hypo hesis H1, demons a ing ha as
GDP inc eases, income inequali y also ises in he Uni ed S a es. This inding aligns wi h
he exis ing li e a u e ha sugges s economic g ow h in he US o en bene i s highe -income
g oups disp opo iona ely, leading o inc eased income inequali y. The s ong posi i e
ela ionship be ween GDP and he Gini index unde sco es he need o policies ha add ess
he unequal dis ibu ion o economic gains.
Au o e al. (2008) also obse ed ha wage inequali y has inc eased wi h economic
g ow h in he USA and ound ha pe sis en inc eases in wage dispa i y since he la e 1980s
a e la gely due o he mechanical e ec s o labo o ce composi ion changes ha cause
con usion. Mishel and Bi ens (2017) a gued ha echnological ad ancemen s exace ba e
wage dispa i ies, con ibu ing o inequali y.
The indings o he Uni ed Kingdom, which show no signi ican posi i e co ela ion
be ween GDP and he Gini index, sugges ha income inequali y is d i en by ac o s
o he han GDP g ow h. Economic policies in he UK should ocus on s uc u al e o ms
and a ge ed in e en ions o add ess he oo causes o inequali y. This could include
p og essi e axa ion, which ensu es ha highe income ea ne s con ibu e a ai sha e,
and enhancing social wel a e p og ams o suppo low-income households. Addi ionally,
in es men in educa ion and skills de elopmen is c ucial o add ess dispa i ies in he
labo ma ke and p omo e social mobili y. Policies aimed a imp o ing access o a o dable
housing and heal hca e can also help o educe inequali y. These a ge ed measu es can
help ensu e ha he bene i s o economic g ow h a e mo e e enly dis ibu ed ac oss
he popula ion.
The signi ican posi i e co ela ion be ween GDP and he Gini index in he Uni ed
S a es implies ha economic g ow h has led o inc eased income inequali y, wi h bene i s
acc uing disp opo iona ely o highe -income g oups. To add ess his, economic policies
should aim o p omo e inclusi e g ow h. This can be achie ed h ough p og essi e axa ion,
ensu ing ha weal hy indi iduals and co po a ions pay hei ai sha e. S eng hening
social sa e y ne s, such as unemploymen bene i s and ood assis ance p og ams, can
p o ide a bu e o hose a he lowe end o he income dis ibu ion. In es ing in educa ion,
pa icula ly in unde se ed communi ies, can help educe inequali y by p o iding equal
oppo uni ies o all. Addi ionally, policies ha p omo e wage g ow h, such as inc easing
he minimum wage and suppo ing collec i e ba gaining, can help o ensu e ha wo ke s
sha e in he economic gains. Add essing heal hca e a o dabili y and accessibili y is also
c i ical o educing he inancial bu den on low-income households.
The phenomenon o income inequali y mani es s di e en ly in he Uni ed Kingdom
and he Uni ed S a es, as e idenced by he eg ession analysis and co obo a ed by he
li e a u e. In he Uni ed Kingdom, income inequali y appea s o be less in luenced by GDP
g ow h and mo e by s uc u al ac o s such as ax policies, labo ma ke changes, and social
wel a e p og ams. In con as , he Uni ed S a es shows a signi ican posi i e co ela ion
be ween GDP g ow h and income inequali y, indica ing ha economic g ow h ends o
bene i highe -income g oups disp opo iona ely. This dicho omy sugges s ha while bo h
coun ies expe ience income inequali y, he unde lying causes and e ec i e mi iga ion
s a egies di e . The UK may bene i mo e om policy in e en ions a ge ing social equi y
and labo ma ke e o ms, whe eas he US needs o add ess he dis ibu ion o economic
gains o ensu e ha g ow h bene i s all socioeconomic s a a. This compa a i e analysis
unde sco es he impo ance o unde s anding he unique socioeconomic dynamics wi hin
each coun y o o mula e e ec i e policies o educing income inequali y.
Economies 2024,12, 274 21 o 25
Theo ies o capi alism and inequali y p o ide a ious lenses o in e p e ou indings.
Ma xis heo y and Pike y’s analysis explain he inc easing inequali y in he US, while he
Kuzne s Cu e and Human Capi al Theo y o e insigh s in o he UK’s di e en expe iences.
Neolibe alism’s impac on policy and inequali y highligh s he impo ance o conside ing
economic policies’ b oade implica ions. Unde s anding hese heo e ical amewo ks helps
o con ex ualize he complex ela ionship be ween economic g ow h and income inequali y
in di e en capi alis economies.
Ka l Ma x (1993) posi ed ha capi alism inhe en ly leads o inequali y, as he capi alis
class (bou geoisie) exploi s he wo king class (p ole a ia ). The accumula ion o capi al by
he ew esul s in inc easing dispa i ies in weal h and powe . Ou indings in he Uni ed
S a es, whe e GDP g ow h co ela es wi h inc eased income inequali y, align wi h Ma x’s
iew ha economic g ow h unde capi alism bene i s he weal hy disp opo iona ely.
Thomas Pike y (2014) a gues ha when he a e o e u n on capi al exceeds he a e
o economic g ow h, inequali y ises. This heo y is e lec ed in ou US indings, whe e
economic g ow h is associa ed wi h inc eased income inequali y, sugges ing ha e u ns
on capi al disp opo iona ely bene i he weal hy.
Acco ding o Ha ey (2007), neolibe al heo ies ad oca e o ee-ma ke policies,
de egula ion, and educ ions in go e nmen spending. C i ics a gue ha such policies
exace ba e income inequali y. The posi i e co ela ion be ween GDP g ow h and income
inequali y in he US ound in ou s udy could be seen as a consequence o neolibe al
policies ha p io i ize economic g ow h o e equi able weal h dis ibu ion. Human Capi al
Theo y posi s ha in es men s in educa ion and skills enhance p oduc i i y and economic
g ow h, po en ially educing inequali y (Becke 2009). Ou indings sugges ha in he
Uni ed Kingdom, whe e GDP g ow h does no signi ican ly impac inequali y, in es ing in
human capi al could play a c ucial ole in add essing income dispa i ies.
The con as ing esul s o he Uni ed Kingdom and he Uni ed S a es highligh he
need o ailo ed economic policies ha e lec he unique socioeconomic dynamics o
each coun y. S one e al. (2015) p o ided a comp ehensi e analysis o his o ical ends in
income inequali y, emphasizing he need o policy measu es o add ess hese issues. These
s udies indica e ha while GDP g ow h is essen ial, i mus be accompanied by policies ha
p omo e equi able weal h dis ibu ion o mi iga e he ad e se e ec s o inc easing inequali y.
In he UK, whe e inequali y is less co ela ed wi h GDP g ow h, policies should ocus on
s uc u al e o ms and social equi y. In he US, whe e GDP g ow h is linked o inc easing
inequali y, policies should aim o ensu e ha economic gains a e mo e b oadly sha ed.
Bo h coun ies can bene i om p og essi e axa ion and in es men s in educa ion and
heal hca e, bu he speci ic ocus and implemen a ion o hese policies should be adap ed
o he di e en d i e s o inequali y in each con ex . Fo he UK, hese ocuses should
include wage dispa i y and he labo ma ke s uc u e (Ka z 1999), egional dispa i ies,
educa ion and skills gap, e c., while o he US, hey should comp ise he weake social
sa e y ne (Bi le e al. 2020), he high income concen a ion a he op, educa ional access
and heal hca e cos s, e c. This nuanced app oach can help o c ea e mo e equi able and
sus ainable economic g ow h in bo h he Uni ed Kingdom and he Uni ed S a es.
Ou s udy and Sakaki’s (2019) esea ch highligh he c i ical ole o income inequali y
and i s impac on economic g ow h in majo capi alis economies like he Uni ed S a es and
he Uni ed Kingdom. While ou s udy uses econome ic analysis o show how edis ibu-
i e policies and social wel a e p og ams can mi iga e he e ec s o economic g ow h on
inequali y, pa icula ly in he UK, Sakaki’s agen -based simula ion sugges s ha a mo e
equal income dis ibu ion leads o highe long- e m g ow h po en ial in coun ies wi h
high ma ginal p opensi y o consume, such as he US and UK. The key di e ence lies
in me hodology—ou esea ch ocuses on eal-wo ld da a and policy impac s, whe eas
Sakaki’s p o ides heo e ical simula ions—bu bo h s udies ein o ce he impo ance o
add essing inequali y h ough policy in e en ions o p omo e sus ainable and inclu-
si e g ow h.
Economies 2024,12, 274 22 o 25
6. Conclusions
The p ima y objec i e o his s udy was o analyze he co ela ion be ween he Gini
index and g oss domes ic p oduc (GDP) in he Uni ed S a es and he Uni ed Kingdom. By
compa ing hese wo majo capi alis economies, his esea ch aimed o shed ligh on he
ela ionship be ween economic g ow h and income inequali y, using igo ous econome ic
echniques o p o ide empi ical insigh s.
The analysis e ealed a signi ican posi i e co ela ion be ween GDP and he Gini
index in he Uni ed S a es, indica ing ha economic g ow h in he US is associa ed wi h
inc easing income inequali y. In con as , he Uni ed Kingdom exhibi ed a much weake
ela ionship be ween GDP and he Gini index. The eg ession esul s o he UK showed no
signi ican co ela ion, sugges ing ha o he ac o s, such as edis ibu i e policies and so-
cial wel a e p og ams, migh mi iga e he impac o economic g ow h on income inequali y.
This s udy con ibu es o he exis ing body o esea ch by p o iding a compa a-
i e analysis o he co ela ion be ween GDP and he Gini index in wo majo capi alis
economies. While many s udies ha e examined hese a iables indi idually wi hin each
coun y, his esea ch is inno a i e in i s di ec compa ison using consis en me hodologies.
By ocusing on he Uni ed S a es and he Uni ed Kingdom, his s udy o e s esh empi ical
e idence and insigh s in o he dynamics o economic g ow h and income inequali y.
Like any empi ical esea ch, his s udy has i s limi a ions. The analysis is based on
his o ical da a, which may no ully cap u e u u e ends and changes in economic policies.
Addi ionally, while his s udy employs obus econome ic echniques, he complexi y
o economic inequali y means ha he e a e likely o he con ibu ing ac o s ha we e
no accoun ed o in his analysis. Despi e hese limi a ions, his s udy p o ides aluable
insigh s in o he ela ionship be ween GDP and income inequali y. The use o i s -o de
di e encing and igo ous s a is ical me hods ensu es ha he esul s a e eliable and
meaning ul. Fu he mo e, he compa a i e app oach adds dep h o he unde s anding o
how di e en policy amewo ks can impac economic ou comes.
Fu u e esea ch in bo h he Uni ed Kingdom and he Uni ed S a es should del e
deepe in o unde s anding he mul i ace ed na u e o income inequali y. In he UK, s udies
should explo e s uc u al ac o s such as ax policies, labo ma ke dynamics, and social
wel a e p og ams, and hei in e ac ion wi h GDP g ow h. Longi udinal s udies acking
changes o e ime and egional analyses can p o ide u he insigh s. Fo he US, esea ch
should e alua e he impac o speci ic economic policies, echnological ad ancemen s,
and au oma ion on inequali y. In es iga ing he ole o educa ion, skills de elopmen ,
and in e gene a ional mobili y is c ucial. Compa a i e s udies wi h o he coun ies ha
ha e success ully managed income inequali y can o e aluable lessons o bo h na ions,
guiding he de elopmen o mo e e ec i e and equi able economic policies.
In ligh o ou indings, i is c ucial o acknowledge he isk o a “g een unjus ansi-
ion,” whe e he ocus on en i onmen al sus ainabili y, d i en by capi alis and neolibe al
app oaches, may p io i ize economic g ow h wi hou adequa ely add essing social inequal-
i ies. A ansi ion ha neglec s he social dimension o he economy could exace ba e
exis ing dispa i ies, lea ing ulne able popula ions u he ma ginalized. To ensu e a jus
ansi ion, i is essen ial ha policies no only aim o en i onmen al goals bu also conside
he equi able dis ibu ion o bene i s and bu dens. Add essing bo h he economic and
social sides o his ansi ion is c i ical o achie ing sus ainable and inclusi e de elopmen
o all.
Au ho Con ibu ions: Concep ualiza ion, P.K., N.T.G., D.P.S. and S.P.M.; me hodology, P.K., N.T.G.,
D.P.S. and S.P.M.; so wa e, P.K., N.T.G., D.P.S. and S.P.M.; alida ion, P.K., N.T.G., D.P.S. and S.P.M.;
o mal analysis, P.K., N.T.G., D.P.S. and S.P.M.; in es iga ion, P.K., N.T.G., D.P.S. and S.P.M.; esou ces,
P.K., N.T.G., D.P.S. and S.P.M.; da a cu a ion, P.K., N.T.G., D.P.S. and S.P.M.; w i ing—o iginal d a
p epa a ion, P.K., N.T.G., D.P.S. and S.P.M.; w i ing— e iew and edi ing, P.K., N.T.G., D.P.S. and
S.P.M.; isualiza ion, P.K., N.T.G., D.P.S. and S.P.M.; supe ision, P.K., N.T.G., D.P.S. and S.P.M.;
p ojec adminis a ion, P.K., N.T.G., D.P.S. and S.P.M.; unding acquisi ion, P.K., N.T.G., D.P.S. and
S.P.M. All au ho s ha e ead and ag eed o he published e sion o he manusc ip .
Economies 2024,12, 274 23 o 25
Funding: This esea ch ecei ed no ex e nal unding.
Ins i u ional Re iew Boa d S a emen : No applicable.
In o med Consen S a emen : No applicable.
Da a A ailabili y S a emen : Da ase can be downloaded a : h ps://www.wo ldbank.o g/ (accessed
on 6 Augus 2024).
Con lic s o In e es : The au ho s decla e no con lic o in e es .
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