IDEAS home Printed from https://ideas.repec.org/a/tra/jlabre/v27y2006i1p1-20.html
   My bibliography  Save this article

The Relationship between Inequality and Labor Market Performance: Evidence from U.S. States

Author

Listed:
  • MARK D. PARTRIDGE

Abstract

A central issue facing society is the equity/growth trade-off. Conventional economic theory suggests enhanced incentives associated with income inequality should increase growth, but at the expense of "fairness." Recent theories challenge this notion by contending that inequality reduces human-capital investment and increases instability. Nevertheless, empirical evidence from U.S. states and across countries suggests an ambiguous relationship between inequality and income growth. Yet, at the state level, because inequality is related to many dis-amenities including crime, it can lead to lower utility and out-migration. The dis-amenities may produce compensating differentials that increase income. Given the inconsistencies regarding income, this study extends the literature by instead examining employment growth. Namely, long-run job growth is closely associated with net migration and any utility gains from migration. Thus, examining relative employment growth indicates whether inequality is associated with net-utility gains from a vibrant economy or net-losses from disamenities. The results suggest that state-level inequality is associated with greater long-run job growth, or enhanced incentives appear to be the dominant factor.

Suggested Citation

  • Mark D. Partridge, 2006. "The Relationship between Inequality and Labor Market Performance: Evidence from U.S. States," Journal of Labor Research, Transaction Publishers, vol. 27(1), pages 1-20, January.
    • Handle: RePEc:tra:jlabre:v:27:y:2006:i:1:p:1-20
    as

    Download full text from publisher

    File URL: http://transactionpub.metapress.com/link.asp?target=contribution&id=06JVC2R0324BAQ92
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

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


    Cited by:

    1. Stephan J Goetz & Mark D Partridge & Dan S Rickman & Shibalee Majumdar, 2011. "Sharing the Gains of Local Economic Growth: Race-to-the-Top versus Race-to-the-Bottom Economic Development," Environment and Planning C, , vol. 29(3), pages 428-456, June.
    2. Chhavi Tiwari & Sankalpa Bhattacharjee & Debkumar Chakrabarti, 2020. "Investigating Regional Inequalities in India: Are Indian Districts Converging?," Journal of International Development, John Wiley & Sons, Ltd., vol. 32(5), pages 684-716, July.
    3. Dambar Uprety, 2020. "How Do Factor Specificity and Emigration Make Income Inequality Worse in Developing Countries?," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 18(4), pages 783-798, December.
    4. 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.
    5. Belal Fallah & Mark Partridge, 2007. "The elusive inequality-economic growth relationship: are there differences between cities and the countryside?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 41(2), pages 375-400, June.
    6. Nor Fatimah Che Sulaiman & Ishak Yussof & Mohd Azlan Shah Zaidi & Noorasiah Sulaiman, 2017. "Long Run Relationship between Income Inequality and Economic Growth: Evidence from Malaysia," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(6), pages 73-88, June.
    7. Jaewoo Cho & Jae Hong Kim & Yonsu Kim, 2019. "Metropolitan governance structure and growth–inequality dynamics in the United States," Environment and Planning A, , vol. 51(3), pages 598-616, May.
    8. Schenck-Fontaine, Anika & Gassman-Pines, Anna, 2020. "Income inequality and child maltreatment risk during economic recession," Children and Youth Services Review, Elsevier, vol. 112(C).
    9. Muhammad Shahbaz, 2010. "Income inequality‐economic growth and non‐linearity: a case of Pakistan," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 37(8), pages 613-636, July.

    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:tra:jlabre:v:27:y:2006:i:1:p:1-20. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Christopher F. Baum (email available below). General contact details of provider: http://transactionpub.metapress.com/link.asp?target=journal&id=110581 .

    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.