Abstract
Why does inequality vary across societies? We advance the hypothesis that in a market economy, where earning differentials reflect variations in productive traits among individuals, a significant component of the differences in inequality across societies can be attributed to variation in societal interpersonal diversity, shaped by the prehistorical out-of-Africa migration. Exploring the roots of inequality within the US population, we find supporting evidence for our hypothesis: variation in the inequality across groups of individuals originating from different ancestral backgrounds can be traced to the degree of diversity of their ancestral populations. This effect is sizable: a move from the lowest to the highest level of diversity in the sample is associated with an increase in the Gini index from the median to the 75th percentile of the inequality distribution.
Oded Galor is the founder of Unified Growth Theory. He has contributed to the understanding of the process of development over the entire course of human history and the role of deep-rooted factors in the transition from stagnation to growth and in the emergence of the vast inequality across the globe. He has pioneered the exploration of the impact of evolutionary processes, population diversity, and inequality on the process of development over most of human existence. His research has redirected research in the field of economic growth to the exploration of the long shadow of history and to the role of biogeographical forces in comparative economic development. It has spawned the influential literatures studying the impact of inequality on the process of development, the interaction between human adaptation and economic development, the transition from stagnation to growth, and the impact of human diversity on comparative economic development.
Oded Galor was awarded Doctorate Honoris Causa from UC Louvain and from Poznań University of Economics & Business. He is an elected Foreign Member of Academia Europaea and an Elected Fellow of the Econometric Society. He is a Research Fellow of CEPR, GLO, and IZA, a Research Associate of the NBER and CESifo, a Sackler Fellow at Tel-Aviv University, and a Fellow of the Economics Department at the Hebrew University. Furthermore, he is the Editor in Chief of the Journal of Economic Growth, Editor of the Journal of Population Economics, and Co-Editor of Macroeconomic Dynamics.