IDEAS home Printed from https://ideas.repec.org/a/ags/jrapmc/339925.html

Entry Regulations and Income Inequality at the Regional Level

Author

Listed:
  • Chambers, Dustin
  • O'Reilly, Colin

Abstract

We combine entry regulation data from the World Bank's subnational Doing Business Index with regional income inequality data from the OECD to test the relationship between entry regulation and income inequality at the subnational level. Controlling for other factors known to affect income inequality, we nd that a one percentage point increase in entry costs (expressed as a percentage of national per capita income) is associated with an increase in regional inequality (measured via the 80/20 income percentile ratio) of just over three percent. These results suggest that uniform national regulations may have disparate regional effects, as compliance costs may vary by subnational region.

Suggested Citation

  • Chambers, Dustin & O'Reilly, Colin, 2019. "Entry Regulations and Income Inequality at the Regional Level," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 49(01), April.
    • Handle: RePEc:ags:jrapmc:339925
    DOI: 10.22004/ag.econ.339925
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/339925/files/Chambers.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.339925?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. César Calderón & Alberto Chong, 2011. "Erratum to: Labor market institutions and income inequality: an empirical exploration," Public Choice, Springer, vol. 147(3), pages 527-527, June.
    2. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    3. Christian Bjørnskov, 2017. "Growth, Inequality, And Economic Freedom: Evidence From The U.S. States," Contemporary Economic Policy, Western Economic Association International, vol. 35(3), pages 518-531, July.
    4. Antonio Ciccone & Elias Papaioannou, 2007. "Red Tape and Delayed Entry," Journal of the European Economic Association, MIT Press, vol. 5(2-3), pages 444-458, 04-05.
    5. James B. Bailey & Diana W. Thomas, 2017. "Regulating away competition: the effect of regulation on entrepreneurship and employment," Journal of Regulatory Economics, Springer, vol. 52(3), pages 237-254, December.
    6. Dustin Chambers & Patrick A. McLaughlin & Laura Stanley, 2019. "Barriers to prosperity: the harmful impact of entry regulations on income inequality," Public Choice, Springer, vol. 180(1), pages 165-190, July.
    7. Djankov, Simeon & Georgieva, Dorina & Ramalho, Rita, 2018. "Business regulations and poverty," Economics Letters, Elsevier, vol. 165(C), pages 82-87.
    8. G. P. Manish & Colin O’Reilly, 2019. "Banking regulation, regulatory capture and inequality," Public Choice, Springer, vol. 180(1), pages 145-164, July.
    9. William F. Shughart II & Robert D. Tollison & Zhipeng Yan, 2003. "Rent Seeking into the Income Distribution," Kyklos, Wiley Blackwell, vol. 56(4), pages 441-456, November.
    10. Klapper, Leora & Laeven, Luc & Rajan, Raghuram, 2006. "Entry regulation as a barrier to entrepreneurship," Journal of Financial Economics, Elsevier, vol. 82(3), pages 591-629, December.
    11. Chambers, Dustin & Munemo, Jonathan, 2017. "The Impact of Regulations and Institutional Quality on Entrepreneurship," Working Papers 07629, George Mason University, Mercatus Center.
    12. James B. Bailey & Diana W. Thomas & Joseph R. Anderson, 2019. "Regressive effects of regulation on wages," Public Choice, Springer, vol. 180(1), pages 91-103, July.
    13. David Neumark & Jennifer Muz, 2016. "The “Business Climate” and Economic Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(1), pages 161-180, March.
    14. Dustin Chambers & Courtney A. Collins & Alan Krause, 2019. "How do federal regulations affect consumer prices? An analysis of the regressive effects of regulation," Public Choice, Springer, vol. 180(1), pages 57-90, July.
    15. Bennett, Daniel L. & Vedder, Richard K., 2013. "A Dynamic Analysis of Economic Freedom and Income Inequality in the 50 U.S. States: Empirical Evidence of a Parabolic Relationship," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 43(01).
    16. Morris M. Kleiner & Kyoung Won Park, 2010. "Battles Among Licensed Occupations: Analyzing Government Regulations on Labor Market Outcomes for Dentists and Hygienists," NBER Working Papers 16560, National Bureau of Economic Research, Inc.
    17. Bologna, Jamie, 2014. "A Spatial Analysis of Entrepreneurship and Institutional Quality: Evidence from U.S. Metropolitan Areas," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 44(2).
    18. Sean E. Mulholland, 2019. "Stratification by regulation: Are bootleggers and Baptists biased?," Public Choice, Springer, vol. 180(1), pages 105-130, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Folorunsho M. Ajide & Titus Ayobami Ojeyinka & Abdulazeez Bunmi Egbewole & Reon Matemane, 2025. "Do less harm than good? Analyzing the effects of anti-money laundering regulations on income inequality in developing economies," Journal of Banking Regulation, Palgrave Macmillan, vol. 26(3), pages 553-572, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dustin Chambers & Colin O’Reilly, 2022. "The economic theory of regulation and inequality," Public Choice, Springer, vol. 193(1), pages 63-78, October.
    2. Chambers, Dustin & O'Reilly, Colin, 2022. "Regulation and income inequality in the United States," European Journal of Political Economy, Elsevier, vol. 72(C).
    3. Choudhury, Sanchari, 2023. "The causal effect of regulation on income inequality across the U.S. states," European Journal of Political Economy, Elsevier, vol. 80(C).
    4. Diana W. Thomas, 2018. "A process perspective on regulation: Who bears the dispersed costs of regulation?," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 31(4), pages 395-402, December.
    5. Kärnä, Anders & Karlsson, Johan & Engberg, Erik & Svensson, Peter, 2020. "Political Failure: A Missing Piece in Innovation Policy Analysis," Working Paper Series 1334, Research Institute of Industrial Economics, revised 21 Apr 2022.
    6. Ramalho,Rita & Saltane,Valentina, 2019. "Does Media Stimulate Reform Efforts ?," Policy Research Working Paper Series 8984, The World Bank.
    7. Stoyanov, Andrey & Zubanov, Nick, 2025. "Exposure to regulation and income inequality in local labor markets: Evidence from the U.S. over the past half-century," Working Papers 45, University of Konstanz, Cluster of Excellence "The Politics of Inequality. Perceptions, Participation and Policies".
    8. Cheng, Hua & Ding, Siying & Liu, Yongzheng, 2024. "The effectiveness of entry deregulation: Novel evidence from removing minimum capital requirements," Journal of Development Economics, Elsevier, vol. 170(C).
    9. Folorunsho M. Ajide & Titus Ayobami Ojeyinka & Abdulazeez Bunmi Egbewole & Reon Matemane, 2025. "Do less harm than good? Analyzing the effects of anti-money laundering regulations on income inequality in developing economies," Journal of Banking Regulation, Palgrave Macmillan, vol. 26(3), pages 553-572, September.
    10. Aaron J. Staples & Dustin Chambers & Trey Malone, 2022. "How many regulations does it take to get a beer? The geography of beer regulations," Regulation & Governance, John Wiley & Sons, vol. 16(4), pages 1197-1210, October.
    11. Andrea Cintolesi & Sauro Mocetti & Giacomo Roma, 2024. "Productivity and entry regulation: evidence from the universe of firms," Temi di discussione (Economic working papers) 1455, Bank of Italy, Economic Research and International Relations Area.
    12. Prantl, Susanne & Spitz-Oener, Alexandra, 2009. "How does entry regulation influence entry into self-employment and occupational mobility?," SFB 649 Discussion Papers 2009-034, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    13. Sameeksha Desai & Johan E. Eklund & Emma Lappi, 2020. "Entry Regulation and Persistence of Profits in Incumbent Firms," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 57(3), pages 537-558, November.
    14. Rafiou Raphaël Bétila, 2021. "The impact of Ease of Doing Business on economic growth: a dynamic panel analysis for African countries," SN Business & Economics, Springer, vol. 1(10), pages 1-34, October.
    15. Pontus Braunerhjelm & Sameeksha Desai & Johan Eklund, 2015. "Regulation, firm dynamics and entrepreneurship," European Journal of Law and Economics, Springer, vol. 40(1), pages 1-11, August.
    16. Polemis, Michael L. & Stengos, Thanasis, 2020. "The impact of regulatory quality on business venturing: A semi-parametric approach," Economic Analysis and Policy, Elsevier, vol. 67(C), pages 29-36.
    17. Ms. Deniz O Igan & Ali Mirzaei & Tomoe Moore, 2018. "How Do Regulations of Entry and Credit Access Relate to Industry Competition? International Evidence," IMF Working Papers 2018/084, International Monetary Fund.
    18. Ismail M. Cole, 2023. "The political economy triangle of government spending, interest‐group influence, and income inequality: Evidence and implications from the US states," Economics and Politics, Wiley Blackwell, vol. 35(3), pages 1122-1176, November.
    19. Heyman, Fredrik & Norbäck, Pehr-Johan & Persson, Lars & Andersson, Fredrik, 2019. "Has the Swedish business sector become more entrepreneurial than the US business sector?," Research Policy, Elsevier, vol. 48(7), pages 1809-1822.
    20. Lucas, David & Boudreaux, Christopher, 2018. "Federal Regulation, Job Creation, and the Moderating Effect of State Economic Freedom," MPRA Paper 92593, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:jrapmc:339925. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/mcrsaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.