Natural Resources – A Curse on Income Equality?

Sammanfattning: This thesis aims at assessing an eventual relationship between natural resource abundance and income inequality. Using existing theories on the natural resource curse, three implications for income inequality are derived and empirically tested. Income inequality is measured by the Gini coefficient while natural resources are split in different categories in order to account for the possibility that different resources have different effects. However, all types are measured as shares of GDP. The results of the empirical analysis suggest that there exist a fairly strong relationship between the variables of interest. “Point resources”, such as metals and ores, have an increasing impact on income inequality while more diffuse resources such as agricultural products seem to have no effect. However, the picture is somewhat blurred since fuel, also regarded as a “point resource”, seems to share the same pattern as the diffuse resources. The findings apply for actual levels of income inequality and resource dependency as well as for changes in income inequality and resource dependency but the results are clearly less significant when measuring changes.