Unlocking the inverted-U: exploring the threshold impact of population aging on income inequality dynamics
As population aging unfolds at an unprecedented scale worldwide, its impact on income inequality continues to be contentious, with no clear consensus in the literature. Rather than viewing the aging-inequality linkage as solely positive or negative, this paper introduces a modified life cycle with...
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| Format: | Article |
| Language: | English |
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Vilnius Gediminas Technical University
2025-06-01
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| Series: | Technological and Economic Development of Economy |
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| Online Access: | https://journals.vilniustech.lt/index.php/TEDE/article/view/23762 |
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| author | Muhammad Raees Shaik Saffarudin Chee Hong Law Koi Nyen Wong Soo Khoon Goh |
| author_facet | Muhammad Raees Shaik Saffarudin Chee Hong Law Koi Nyen Wong Soo Khoon Goh |
| author_sort | Muhammad Raees Shaik Saffarudin |
| collection | DOAJ |
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As population aging unfolds at an unprecedented scale worldwide, its impact on income inequality continues to be contentious, with no clear consensus in the literature. Rather than viewing the aging-inequality linkage as solely positive or negative, this paper introduces a modified life cycle with precautionary behavior, indicating that inequality may initially worsen with aging before stabilizing at later stages. The Dynamic Panel Threshold Kink (DPTK) regression method is used to identify the threshold point of aging intensity at which the inequality begins to moderate following a period of intensification. The findings reveal a threshold aging intensity of 1.4%, which supports an inverted-U characterization of the aging-inequality nexus. The results suggest that liberalizing trade and improving government redistribution can assist countries experiencing a rise in inequality. At the same time, the prevalence of precautionary effects due to population aging may offer a natural defense against the detrimental effects of inequality over time.
First published online 05 June 2025
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| format | Article |
| id | doaj-art-1ec4f08e0fe44723b84dd6da6e27f261 |
| institution | Kabale University |
| issn | 2029-4913 2029-4921 |
| language | English |
| publishDate | 2025-06-01 |
| publisher | Vilnius Gediminas Technical University |
| record_format | Article |
| series | Technological and Economic Development of Economy |
| spelling | doaj-art-1ec4f08e0fe44723b84dd6da6e27f2612025-08-20T03:26:04ZengVilnius Gediminas Technical UniversityTechnological and Economic Development of Economy2029-49132029-49212025-06-0110.3846/tede.2025.23762Unlocking the inverted-U: exploring the threshold impact of population aging on income inequality dynamicsMuhammad Raees Shaik Saffarudin0Chee Hong Law1Koi Nyen Wong2Soo Khoon Goh3Department of Business and Finance, Sunway College, Johor Bahru, Johor, MalaysiaSchool of Social Sciences, Universiti Sains Malaysia, Penang, MalaysiaSunway Business School, Sunway University, Selangor, MalaysiaCentre for Policy Research, Universiti Sains Malaysia, Penang, Malaysia As population aging unfolds at an unprecedented scale worldwide, its impact on income inequality continues to be contentious, with no clear consensus in the literature. Rather than viewing the aging-inequality linkage as solely positive or negative, this paper introduces a modified life cycle with precautionary behavior, indicating that inequality may initially worsen with aging before stabilizing at later stages. The Dynamic Panel Threshold Kink (DPTK) regression method is used to identify the threshold point of aging intensity at which the inequality begins to moderate following a period of intensification. The findings reveal a threshold aging intensity of 1.4%, which supports an inverted-U characterization of the aging-inequality nexus. The results suggest that liberalizing trade and improving government redistribution can assist countries experiencing a rise in inequality. At the same time, the prevalence of precautionary effects due to population aging may offer a natural defense against the detrimental effects of inequality over time. First published online 05 June 2025 https://journals.vilniustech.lt/index.php/TEDE/article/view/23762income inequalitypopulation agingpanel datakink threshold regression |
| spellingShingle | Muhammad Raees Shaik Saffarudin Chee Hong Law Koi Nyen Wong Soo Khoon Goh Unlocking the inverted-U: exploring the threshold impact of population aging on income inequality dynamics Technological and Economic Development of Economy income inequality population aging panel data kink threshold regression |
| title | Unlocking the inverted-U: exploring the threshold impact of population aging on income inequality dynamics |
| title_full | Unlocking the inverted-U: exploring the threshold impact of population aging on income inequality dynamics |
| title_fullStr | Unlocking the inverted-U: exploring the threshold impact of population aging on income inequality dynamics |
| title_full_unstemmed | Unlocking the inverted-U: exploring the threshold impact of population aging on income inequality dynamics |
| title_short | Unlocking the inverted-U: exploring the threshold impact of population aging on income inequality dynamics |
| title_sort | unlocking the inverted u exploring the threshold impact of population aging on income inequality dynamics |
| topic | income inequality population aging panel data kink threshold regression |
| url | https://journals.vilniustech.lt/index.php/TEDE/article/view/23762 |
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