Institutional environment and individual income: a multilevel application.

This paper is aimed at assessing how institutions, whether at the individual level or at the more aggregated level (institutional environment of the countries), relate to a categorical measure of individual income. To meet this need, as variables at different levels are included, the hierarchical logistic regression model is used, and the individual income category is the dependent variable. The results show that institutional dimensions such as family, trust, gender equality, interest in politics and democracy, competition and government size are positively related to higher income. Otherwise, institutional dimensions such as religion, obedience, authority and income equality are inversely related to the highest income category. Furthermore, regarding formal institutions at the aggregate level (countries), a positive association between individual income and being in an institutional environment with better guarantees of property rights and smaller government size is suggested. These results strengthen arguments that institutional environments that value trust, democracy and property rights can positively influence the determination of the individuals' income levels. [ABSTRACT FROM AUTHOR]