Modeling income inequality and openness in the framework of Kuznets curve: New evidence from China

This article tests the relationship between openness and income inequality in openness Kuznets curve framework. The Auto Regressive Distributed Lag (ARDL) estimator is employed to establish the long run relationship between openness and income inequality. We add to the literature by noting that Kuznets curve fits the relationship between openness and income equality in the case of China. This evidence is new and in line with the Kuznets hypothesis that income inequality rises with the increase of openness and then starts fall after a critical point.

► Relationship between openness and income inequality. ► Kuznets curve framework. ► The Auto Regressive Distributed Lag (ARDL) estimator. ► Inequality rises with the increase of openness and then starts fall.