Age structure, income distribution and economic growth

A recent body of empirical cross-country research has confirmed that income inequality is negatively related to economic growth. This paper provides an explanatory channel for this observed relationship. The novelty of our approach consists in the use of demographic channels to account for cross-country differentials in economic growth and income distribution. We present four models that have emerged as the most plausible transmission, mechanisms linking inequality to slower growth. In each instance we demonstrate how a consideration of demographic age structure can complement the four mainstream accounts.