January 02, 2024 | Working Paper
  • Type of publication: Working Paper
  • Research or In The Media: Research
  • Research Area: Finance, Jobs & Macroeconomics
  • Publication Date: 2024-01-02
  • View pdf
  • Authors:
    • Add Authors: Adem Yavuz Elveren
    • Add Authors: Ceyhun Elgin
  • Show in Front Page Modules: Yes
  • JEL Codes: D63, O17


In this paper we investigate the response of two inequality metrics to different IMF programs. To this end, we use a relatively large annual (unbalanced) cross-country panel dataset that includes the Gini index and the Estimated Household Income Inequality as the two relevant inequality metrics and covers the period from 1950 to 2016 in an annual basis for 159 countries. Our empirical analysis indicates that in countries where the informal sector size (as percentage of GDP) is relatively larger, the extent of income inequality increases after different IMF programs, but particularly so after standby arrangements. However, we also show that the opposite is true, when informal sector size is small, i.e., inequality declines after different IMF programs.

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