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

Abstract

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.