ABSTRACT
This chapter assesses the impact of ICT on income inequality and investigates the involved transmission channels for a sample of 22 developing countries. We consider a variety of Information and Communication Technologies (ICT) proxies and various inequality indicators to offer more insight on the ICT-inequality nexus. The SGMM estimates reveal that while some ICT proxies contribute to reduce significantly income disparities, others do not produce any significant impact or contribute to widen the income gap. The estimation results also show that the relationship between ICT and inequality is nonlinear. Another interesting finding is that school enrolment contributes to enhance the income share of the poorest social groups, while government expenditure ensures an important redistributive role. Finally, human capital, trade openness, and financial development are the main channels through which ICT contribute to reduce inequality. Oppositely, the growth channel benefits much more to high-income social groups, contributing therefore to widen the income gap.
