The Cubic Form Hypothesis and the Flying Geese Pattern Hypothesis of Income Distribution: The Case of Korea

Abstract

This paper examines the cubic form hypothesis and the flying geese pattern hypothesis of income distribution. We use time series data for the Gini coefficients of Korea for 1961-2006 and panel data calculated based on a household income survey for the period 1998-2003. We show; (1) The Korean economy has a cubic form inequality as shown in many advanced countries such as the U.S, U.K and Japan, and (2) Different relationships between income inequality and income level are observed among regions since less developed rural areas lagged behind more developed urban ones. Thus the pattern of the change of inequality by region in Korea has similarities to the flying geese pattern and the multiple catching up pattern that are processes of the industrialization of manufacturing.Income inequality, Cubic form, Flying geese pattern of development, Multiple catching-up