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Distributional Impact of the American Recovery and Reinvestment Act-- A Microsimulation Approach

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  • Ajit Zacharias
  • Thomas Masterson
  • Kijong Kim

Abstract

Over the last two decades, those at the bottom of the income scale have seen their incomes stagnate, while those at the top have seen theirs skyrocket; without intervention, the recession that began in December 2007 was likely to exacerbate this trend. Will the American Recovery and Reinvestment Act of 2009 (ARRA) be able to keep the situation from getting worse for those at the bottom of the income scale? Will ARRA reverse the upward trend in inequality that we've seen in the recent past? The authors of this new working paper employ a microsimulation of ARRA to address these questions. They find that, despite a large amount of job creation, ARRA is likely to have little impact on overall income inequality, or on the income gaps between relatively advantaged and disadvantaged groups.

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Bibliographic Info

Paper provided by Levy Economics Institute in its series Economics Working Paper Archive with number wp_568.

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Date of creation: Jul 2009
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Handle: RePEc:lev:wrkpap:wp_568

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Web page: http://www.levyinstitute.org

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Cited by:
  1. Rania Antonopoulos & Kijong Kim & Tom Masterson & Ajit Zacharias, 2010. "Investing in Care: A Strategy for Effective and Equitable Job Creation," Economics Working Paper Archive wp_610, Levy Economics Institute.
  2. Thomas Masterson, 2014. "Quality of Statistical Match and Employment Simulations Used in the Estimation of the Levy Institute Measure of Time and Income Poverty (LIMTIP) for South Korea, 2009," Economics Working Paper Archive wp_793, Levy Economics Institute.
  3. Thomas Masterson, 2012. "Simulations of Full-Time Employment and Household Work in the Levy Institute Measure of Time and Income Poverty (LIMTIP) for Argentina, Chile, and Mexico," Economics Working Paper Archive wp_727, Levy Economics Institute.

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