The Impact of the Tourism Industry on Income Distribution in Selected Developing Countries during 2010-2020

Mustafa Ibrahimi, Abdul Wahid Mohammdi , Ghulam Ali Mohebi


Equitable income distribution and efforts to reduce inequality are among the most important concerns of societies in the contemporary world. Developing countries are seeking income-generating resources while simultaneously striving to reduce income inequalities. The tourism industry, as one of the most significant income and employment-generating sectors, can contribute to the achievement of both employment and income goals simultaneously. This study examines the impact of the tourism industry on income distribution in selected developing countries during the period 2010-2020, using a combined data approach. The results of the estimation indicate a significant negative relationship between income derived from the tourism industry and the Gini coefficient. Therefore, an increase in the number of tourists leads to a reduction in income inequality and consequently improves income distribution. To sustain this effect, tourism growth should benefit productive factors with lower income levels. Hence, the development and structure of the tourism industry are crucial, especially considering that tourism development can serve as a way out of the single-product economy for selected developing countries. Consequently, these countries can not only improve income distribution through traditional and well-known income distribution resources such as taxes, subsidies, and investments in human resources but also through the expansion of the tourism industry.

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