Is Income Inequality Endogenous In Regional Growth?
This 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.
Volume (Year): 20 (2011)
Issue (Month): 3-4 (September-December)
|Contact details of provider:|| Postal: York Hall 327, 2275 Bayview Avenue, Toronto, Ontario M4N 3M6|
Web page: http://www.jid-online.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Burkey, Mark L., 2006. "Gini Coefficients for the 2000 Census," MPRA Paper 57900, University Library of Munich, Germany.
- Banerjee, Abhijit V & Duflo, Esther, 2003.
"Inequality and Growth: What Can the Data Say?,"
Journal of Economic Growth,
Springer, vol. 8(3), pages 267-299, September.
- Davis Lewis S, 2007. "Explaining the Evidence on Inequality and Growth: Informality and Redistribution," The B.E. Journal of Macroeconomics, De Gruyter, vol. 7(1), pages 1-35, January.
- Aghion, Philippe & Caroli, Eve & GarcÃa-PeÃ±alosa, Cecilia, 1999.
"Inequality and Economic Growth: The Perspective of the New Growth Theories,"
12502063, Harvard University Department of Economics.
- Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December.
- Aghion, Philippe & Caroli, Eve & Garcia-Penalosa, Cecilia, 1999. "Inequality and economic growth: the perspective of the new growth theories," CEPREMAP Working Papers (Couverture Orange) 9908, CEPREMAP.
- Mills, Edwin S. & Price, Richard, 1984. "Metropolitan suburbanization and central city problems," Journal of Urban Economics, Elsevier, vol. 15(1), pages 1-17, January.
- Li, Hongyi & Zou, Heng-fu, 1998.
"Income Inequality Is Not Harmful for Growth: Theory and Evidence,"
Review of Development Economics,
Wiley Blackwell, vol. 2(3), pages 318-334, October.
- Hongyi Li & Heng-fu Zou, 1998. "Income Inequality Is Not Harmful for Growth: Theory and Evidence," CEMA Working Papers 74, China Economics and Management Academy, Central University of Finance and Economics.
- Roland Benabou, 2000. "Unequal Societies: Income Distribution and the Social Contract," American Economic Review, American Economic Association, vol. 90(1), pages 96-129, March.
- Barro, Robert J, 2000. "Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
- Persson, T. & Tabellini, G., 1993.
"Is Inequality Harmful for Growth,"
537, Stockholm - International Economic Studies.
- Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
- Rupasingha, Anil & Goetz, Stephan J. & Freshwater, David, 2006. "The production of social capital in US counties," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(1), pages 83-101, February.
- repec:dau:papers:123456789/10091 is not listed on IDEAS
- Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-1381, September.
When requesting a correction, please mention this item's handle: RePEc:jid:journl:y:2011:v:20:i:3-4:p:43-56. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Timm Boenke)
If references are entirely missing, you can add them using this form.