Is Income Inequality Endogenous In Regional Growth?
AbstractThis study focuses on testing the relationship between income inequality and economic growth within counties in the United States, and the channels through which the effects of a relationship are observed. Based on a system of equations estimation, the empirical results confirm the hypotheses that income inequality has a growth-dampening effect, that income inequality is endogenous to regional growth, and that the channels through which income inequality determines growth are adjustments at the regional level, such as migration and changes in employment and incomes. The results have numerous policy implications. The noted forces can be utilized as policy instruments to mitigate income inequality and its growth dampening effects, because a) as income inequality is endogenous, its equilibrium level can be internally determined within a regional growth process, b) since traditional income inequality mitigating policies have an indirect effect on overall regional growth, they may have unintended indirect effects on income inequality, and c) regional growth adjustment also equilibrates income inequality.
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Bibliographic InfoArticle provided by Journal of Income Distribution in its journal Journal of Income Distribution.
Volume (Year): 20 (2011)
Issue (Month): 3-4 (September-December)
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income inequality; economic growth; Gini coefficient; growth modeling; economic policy;
Other versions of this item:
- Yohannes Hailu & Mulugeta Kahsai & Tesfa Gebremedhin & Randall Jackson, 2009. "Is Income Inequality Endogenous in Regional Growth?," Working Papers 200901, Regional Research Institute, West Virginia University.
- Hailu, Yohannes G. & Kahsai, Mulugeta S. & Gebremedhin, Tesfa G. & Jackson, Randall W., 2009. "Is Income Inequality Endogenous in Regional Growth?," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46320, Southern Agricultural Economics Association.
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
- J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
- R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
- R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock
- R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
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