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Does Political Dominance Impact Economic Inequality?

Author

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  • Hang Keun Ryu

    (Department of Economics, Chung Ang University, Seoul, Korea)

  • Daniel J. Slottje

    (Department of Economics, Southern Methodist University, Dallas, Texas, USA)

Abstract

This paper examines the relationship between political dominance and economic inequality in the U.S. for the years 1947-2017. Conventional wisdom suggests that when Democrats control Congress and the Presidency, they will pursue policy goals that are inequality reducing through government actions. Republican controlled Congresses and presidencies are presumed to pursue economic growth and limited government intervention policies. However, are these beliefs true? Economic inequality is a broad term with various interpretations. In this paper we adopt a different approach. We consider the distribution of utility that individuals possess, while understanding that of course this depends in part on their income levels. We do find that Democratic presidential administrations correlate with lowering economic inequality and when Republican presidents hold the White House this correlates with increasing levels of economic inequality. However, we find that dominance by a given party in Congress has a negligible impact.

Suggested Citation

  • Hang Keun Ryu & Daniel J. Slottje, 2020. "Does Political Dominance Impact Economic Inequality?," Advances in Decision Sciences, Asia University, Taiwan, vol. 24(1), pages 121-149, March.
    • Handle: RePEc:aag:wpaper:v:24:y:2020:i:1:p:121-149
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    References listed on IDEAS

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    More about this item

    Keywords

    Political party dominance; economic inequality trends; utility shifts due to presidential choice;
    All these keywords.

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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