Kuznets, Simon, "Economic Growth and Income Inequality," American Economic Review, 45, no. 1 (1953), pp. 1-28; Google Scholar "Quantitative Aspects of the Economic Growth of Nations: VIII, Distribution of Income by Size," Economic Development and Cultural Change, 11, no. 2 (1963), pp. 1-80. CrossRef Google Scholar 11 Bacha, Edmar L., an average annual growth rate of 9.15 %. Initially, the economic growth also reduced income inequality; however income inequality rose substantially from mid 1980s to mid 1990s. The second half of 1990s saw some reduction in inequality, but it did not last. Inequality continued to rise, reaching a peak in mid 2000s before showing some signs of 4.1 Productivity Growth and Regional Convergence in a One-sector and a Multi-sector Model 45 4.2 Evidence on Productivity Catch-up and Convergence 56 6.1 Technical Change and Employment Growth across Sectors 82 7.1 Trend in Income Inequality across Regions 98 7.2 Sectoral Shares of GDP across Regions 99.37 S ummary Statistics 105 This paper describes the long-term global trends in education inequality since 1870. Inequality in years of schooling is shown to have mechanically decreased along with the decline in the share of illiterate people. In search of a monetary equivalent of years of schooling, we turn to Mincer ( 1974) human capital ineq uality. Germany, Simon Kuznets (1955) raised his famous argument: income inequality in conjunction with economic development in the developed countries first tended to expand and then to shrink. This implies an inverted U-curve between the level of economic development and income inequality, known as the Kuznets curve. This has 1Kuznets (1955) original paper explained the curve in terms of the transition between agriculture and industry. Likewise, the transition from the inefficient state sector to the new private sector may generate a similar curve. What is different in Russia and many other transition economies is that the initial rise in inequality was rapid, which 3 This paper belongs to the broad literature on the relationship between economic development and income inequality. Early cross-country statistical studies in this literature largely confirm Kuznets's hypothesis of an inverted-U relationship between income inequality and economic development - at early stages of development, income 2 Kuznets hypothesizes that economic inequality increases over time and then after a threshold becomes more equal as per capita income increases; hence the income-environment nexus is dubbed the "environmental Kuznets curve" (EKC). In 1955 Kuznets developed a hypothesis about the relationshipbetween the degree of personal income inequality within a countryand the level of economic development of the country. Thishypothesis suggests that with economic growth, interpersonalincome inequality first increases but after a certain pointstarts to decline. The debate about the relationship between inequality and economic growth has a long story in the economic literature. Starting with the work of Kuznets (1955, 1963), many distinct arguments have been put forward about the causal direction between these two ariablesv and the e ects between them. Here, I focus on the e ects of inequality on growth. Noting increasing economic equality in three developed nations and using a theoretic