Zhansaya Temerbulatova

Al-Farabi Kazakh National University, Almaty, Kazakhstan 

E-mail: zhansaya.temerbulatova@kaznu.edu.kz

ORCID 0000-0002-3205-0948 

Regional disparities and dual dynamics: Economic growth and income inequality in Kazakhstan

Bulat Mukhamediyev

Al-Farabi Kazakh National University, Almaty, Kazakhstan 

E-mail: bulat.mukhamediyev@kaznu.edu.kz

ORCID 0000-0002-1490-302X

Aknur Zhidebekkyzy

Al-Farabi Kazakh National University, Almaty, Kazakhstan 

E-mail: aknur.zhidebekkyzy@kaznu.edu.kz

ORCID 0000-0003-3543-547X

Svitlana Bilan

Széchenyi István University, Gyor, Hungary;

Sumy State University, Sumy, Ukraine 

E-mail: s.bilan@csr-pub.eu

ORCID 0000-0001-9814-5459

Abstract. This study examines the complex relationships between economic growth and income inequality in different regions of Kazakhstan, revealing the nuances of their interaction. The article aims to assess the long-term and short-term effects of economic growth on income inequality in both forward and reverse directions across the regions of Kazakhstan. Employing region-specific time series data allowed us to examine the bidirectional impact of economic growth on inequality, using an error correction model (ECM) to describe short-run and long-run relationships. The results highlight that the relationship between economic growth and income inequality is heterogeneous across regions, reflecting each area's unique economic and social landscapes. The estimation results support the hypothesis of an inverted U-shaped Kuznets curve linking GRP per capita to inequality with varying starting points for different regions. Regarding the inverse relationship, we identified a positive causal relationship for the West Kazakhstan, Zhambyl and Pavlodar regions, indicating that increased income inequality stimulated economic growth. The study also highlights the significant role of trade, labour force, investment and government consumption in shaping these relationships.

Received: June, 2023

1st Revision: April, 2024

Accepted: May, 2024

DOI: 10.14254/2071-789X.2024/17-2/12

JEL Classification: C32, D63, R11, O47

Keywords: income inequality, economic growth, time series analysis, region-specific model, Kuznets curve, regional analysis