Economic Development and Income Inequality: The Taiwan Case

• Main Author: Chang, Ju-kuang
• Format: Others
• Published: PDXScholar 1995
• Subjects: Income distribution > Taiwan; Taiwan > Economic conditions > 1945-1975; Taiwan > Economic conditions > 1975; Sociology
• Online Access: https://pdxscholar.library.pdx.edu/open_access_etds/4875; https://pdxscholar.library.pdx.edu/cgi/viewcontent.cgi?article=5947&context=open_access_etds

This thesis examines income inequality in Taiwan from three perspectives: economic development, political democracy, and world-system/dependence. Education, population growth, population structure, unemployment, savings, and export growth are treated as variables. Below are the important conclusions. Economic development has an effect on income inequality. The level of development is crucial. In the 1950s and 1960s, the relationship was significant, but in the next two decades economic development did not further decrease income inequality. Sector dualism was not a good predictor. Democratization did not have an obvious relation with income inequality. But the stable political environment and the endeavors of government to keep the society stable were crucial to economic development and improvement in income inequality. Foreign capital and export dependence did not retard economic development and worsen income inequality. But the influence of foreign capital did not contradict the world-system/dependence argument. Expansion of education had a negative relation with income inequality. The most important thing was the expansion of primary school education and junior high school education. The predicted relation between population growth and population structure and income inequality was not totally supported. Export expansion and savings expansion had an important influence on economic development and, like the relation between the economic development and income inequality, the relation between the expansion of exports and savings and income inequality was stronger in the 1960s than in the 1950s. Unemployment had almost the same change pattern as income inequality. This implies that employment had a negative relation with income inequality and, after 1970, the low unemployment helped keep inequality at a low level in the 1970s and 1980s. In the late 1980s and early 1990s income inequality increased slightly as radical changes in economic structure, political environment, and other social factors transformed Taiwan. Other developed countries also show an increase in income inequality associated with similar changes. Thus income inequality in Taiwan is predicted to increase further.