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Do Economic Development Efforts Benefit All? Business Attraction and Income Inequality

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  • Xiaobing Shuai

    (University of Richmond)

Abstract

This paper extends the current literature on county-level income distribution in the United States by explicitly exploring the effect of business-attraction efforts by state governments. Using county-level job attraction and retention data from 2000 to 2005 in Virginia to explain the income distribution from 2006 to 2010, while controlling for demographic and socioeconomic conditions of local communities, this study shows that bringing in manufacturing jobs can reduce income inequality at the local level while attracting jobs in professional and business services tends to increase local income inequality. The results indicate that state and local governments’ efforts to attract and retain manufacturing jobs help improve local income distribution.

Suggested Citation

  • Xiaobing Shuai, 2015. "Do Economic Development Efforts Benefit All? Business Attraction and Income Inequality," The Review of Regional Studies, Southern Regional Science Association, vol. 45(1), pages 35-56, Spring.
    • Handle: RePEc:rre:publsh:v45:y:2015:i:1:p:35-56
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    Cited by:

    1. Jia Wang & Stephen E. Ellis & Cynthia Rogers, 2018. "Income Inequality and Economic Development Incentives in US States: Robin Hood in Reverse?," The Review of Regional Studies, Southern Regional Science Association, vol. 48(1), pages 93-117, Spring.

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    More about this item

    Keywords

    economic development; income distribution; inequality; business attraction;
    All these keywords.

    JEL classification:

    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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