Kuznets’ empirical findings provide deeper insight into the process of growth. First, Kuznets’ discovery shows that the current developing nations’ characteristics are different from the developed ones back in the time of industrial revolution. Second, Kuznets found that growth first leads to income inequality as industrialization makes some people much richer than the others. Later, as the country becomes more service sector-based, the process will reverse itself, narrowing the inequality gap.
Kuznets’ empirical findings provide deeper insight into the process of growth. First, Kuznets’ discovery shows that the current developing nations’ characteristics are different from the developed ones back in the time of industrial revolution. Second, Kuznets found that growth first leads to income inequality as industrialization makes some people much richer than the others. Later, as the country becomes more service sector-based, the process will reverse itself, narrowing the inequality gap.