Urbanization and income inequality in OECD countries

Understanding the factors affecting income inequality, which is one of the main problems of countries, play an important role in determining the policies to be implemented. Many factors affecting income inequality have been empirically discussed in the relevant literature. One of these factors is urbanization. Considering that more than half of the world's population lives in cities, it is important to examine the possible effects of urbanization on income inequality. In this context, the main purpose of the study is to examine the relationship between urbanization and income inequality in OECD countries over the period 2003-2019 using panel regression method. Findings obtained from the fixed effect Driscoll-Kraay estimator show a positive relationship between urbanization and income inequality.