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Great Recession and Income Inequality: a State-level Analysis

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  • Mehmet E. Yaya

    (Eastern Michigan University)

Abstract

This paper analyzes the impact of the Great Recession on the income inequalities of racial and ethnic groups, namely whites, blacks, Hispanics, and Asians, in the USA. As the US economy fell into a deep recession during the late 2000s, the unemployment rate skyrocketed, the stock markets crashed, and incomes significantly declined. Using the American Community Survey from 2005 to 2016, this paper presents novel results that suggest the Great Recession not only increased the overall income inequality in the USA but also within- and between-group income inequalities among racial and ethnic groups. Furthermore, the impact of the recession on inequality is not uniform across these racial and ethnic groups. More specifically, during the Great Recession, inequality among blacks, Hispanics, and Asians has significantly increased, while whites experienced only a moderate increase in income inequality. The findings of this work are both timely and relevant, especially in terms of public policy. Policymakers cognizant of problems associated with within- and between-group inequalities might concentrate on policies alleviating the impact of the recession, especially those geared toward racial and ethnic minorities.

Suggested Citation

  • Mehmet E. Yaya, 2018. "Great Recession and Income Inequality: a State-level Analysis," Journal of Economics, Race, and Policy, Springer, vol. 1(2), pages 112-125, September.
  • Handle: RePEc:spr:joerap:v:1:y:2018:i:2:d:10.1007_s41996-018-0016-6
    DOI: 10.1007/s41996-018-0016-6
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    References listed on IDEAS

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    1. Robert Argento & Victoria L. Bryant & John Sabelhaus, 2015. "Early Withdrawals From Retirement Accounts During The Great Recession," Contemporary Economic Policy, Western Economic Association International, vol. 33(1), pages 1-16, January.
    2. Lambert, Peter J & Aronson, J Richard, 1993. "Inequality Decomposition Analysis and the Gini Coefficient Revisited," Economic Journal, Royal Economic Society, vol. 103(420), pages 1221-1227, September.
    3. Mariña Fernández Salgado & Francesco Figari & Holly Sutherland & Alberto Tumino, 2014. "Welfare Compensation for Unemployment in the Great Recession," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S1), pages 177-204, May.
    4. Gary Hoover & Mehmet Yaya, 2010. "Racial/Ethnic Differences in Income Inequality Across US Regions," The Review of Black Political Economy, Springer;National Economic Association, vol. 37(2), pages 79-114, June.
    5. Thomas Masterson & Ajit Zacharias & Fernando Rios-Avila & Edward N. Wolff, 2019. "The Great Recession and Racial Inequality: Evidence from Measures of Economic Well-Being," Journal of Economic Issues, Taylor & Francis Journals, vol. 53(4), pages 1048-1069, October.
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