Empirical Research on Technological Progress and Income Gap

With the World Bank Database's data of 217 countries from the year of 2000 to 2019, this paper conduct a dynamic panel model using the fixed effect estimation, random effect estimation and generalized moment estimation method to explore the relationship between technological progress and income gap. The results show that the technology can reduce the income gap. In addition, in order to get robust estimation, this paper also takes regional average level of technology as the instrumental variable to confirm this negative relationship. In order to narrow the income gap, this paper suggests that we should focus on promoting the development of social tertiary industry and high-tech industry and pay more attention to education expenditure in the distribution policy.