Working Paper

The effect of foreign aid on income inequality: Evidence from panel cointegration

Kiel Working Papers, 1762

This paper examines the long-run effect of foreign aid on income inequality for 21 recipient countries using panel cointegration techniques to control for omitted variable and endogeneity bias. We find that aid exerts an inequality increasing effect on income distribution.


Dierk Herzer
Peter Nunnenkamp


Publication Date
JEL Classification
D31, F35, C23