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Income Inequality and Economic Freedom in the U.S. States

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Author Info
Nathan J. Ashby (Department of Economics, West Virginia University)
Russell S. Sobel (Department of Economics, West Virginia University)

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Abstract

This paper examines the impact of economic freedom on income inequality using cross-sectional data for U.S. states. While previous research has explored this relationship internationally, the results have been conflicting. In addition, while it seems obvious that the large institutional differences across countries will impact income inequality, it isn’t so obvious that the smaller variation in policies among U.S. states can have a measurable impact. Can improvements in income inequality be used as a justification for marginal pro-market policy reforms at the state level, or is this argument applicable only to national-level institutional reforms?

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File URL: http://www.be.wvu.edu/div/econ//work/pdf_files/06-08.pdf
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File Function: First version, 2006
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Paper provided by Department of Economics, West Virginia University in its series Working Papers with number 06-08.

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Length: 29 pages
Date of creation: 2006
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Handle: RePEc:wvu:wpaper:06-08

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  1. Alesina, Alberto & Perotti, Roberto, 1994. "The Political Economy of Growth: A Critical Survey of the Recent Literature," World Bank Economic Review, Oxford University Press, vol. 8(3), pages 351-71, September.
  2. Berggren, Niclas, 1999. " Economic Freedom and Equality: Friends or Foes?," Public Choice, Springer, vol. 100(3-4), pages 203-23, September. [Downloadable!] (restricted)
  3. Alesina, Alberto & Rodrik, Dani, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 465-90, May. [Downloadable!] (restricted)
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  4. Berggren, Niclas, 2003. "The Benefits of Economic Freedom: A Survey," Ratio Working Papers 4, The Ratio Institute. [Downloadable!]
  5. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June. [Downloadable!] (restricted)
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  6. Heckelman, Jac C & Stroup, Michael D, 2000. "Which Economic Freedoms Contribute to Growth?," Kyklos, Blackwell Publishing, vol. 53(4), pages 527-44.
  7. Tomi Ovaska & Russell S. Sobel, 2004. "Entrepreneurship in Post-Socialist Economies," Working Papers 04-06, Department of Economics, West Virginia University. [Downloadable!]
  8. Russell S. Sobel, 1999. "Theory and Evidence on the Political Economy of the Minimum Wage," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 761-785, August. [Downloadable!] (restricted)
  9. Birdsall, Nancy & Ross, David & Sabot, Richard, 1995. "Inequality and Growth Reconsidered: Lessons from East Asia," World Bank Economic Review, Oxford University Press, vol. 9(3), pages 477-508, September.
  10. James D. Gwartney & Robert A. Lawson & Randall G. Holcombe, 1999. "Economic Freedom and the Environment for Economic Growth," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 127(4), pages 643-, December.
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