Human development and income inequality as factors of regional economic growth

Abstract

This paper examines the impact of the Human Development Index and the Gini index on the Real Gross Regional Product (GRP) per person employed in 68 regions of the Russian Federation during the 2000 – 2014 period. We test and compare the results from two groups of models. The first group of models reveals that higher GRP per person employed is associated with higher levels of human development and income inequality in the Russian Federation regions. These results stay robust within the models estimated by linear regression with panel-corrected standard errors, where Regional FE, Time FE and Federal District FE are controlled. The estimation results from the second group of models provide evidence that regions with higher levels of Real Gross Regional Product (GRP) per person, human development and income inequality were growing slower, on average, than regions with lower levels of these parameters.