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Employment Growth and Income Inequality: Accounting for Spatial and Sectoral Differences

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  • Pede, Valerien O.
  • Florax, Raymond J.G.M.
  • Partridge, Mark D.

Abstract

This paper revisits the inequality-growth relationship accounting for sectoral differences and focusing on US counties. For 8 two-digit industries of the NAICS classification, we estimated a conditional growth model where employment growth depends on regional income inequality and a number of control variables. Spatial econometrics techniques are used to account for spatial dependence. Results indicate that there is no association between employment growth and family income inequality for the Agriculture, Forestry, Fishing and Hunting sector and the Real Estate, Rental and Leasing sector. However, income inequality consistently shows a negative impact on employment growth in the construction sector, and results are mixed for other sectors such as: Manufacturing; Retail Trade; Professional Scientific and Technical Services; Accommodation and Food Services; Educational Services. In several sectors, mixed results were obtained when differentiation is made between urban and rural samples.

Suggested Citation

  • Pede, Valerien O. & Florax, Raymond J.G.M. & Partridge, Mark D., 2009. "Employment Growth and Income Inequality: Accounting for Spatial and Sectoral Differences," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49460, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea09:49460
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    File URL: http://purl.umn.edu/49460
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    Cited by:

    1. repec:ris:ecoint:0805 is not listed on IDEAS
    2. Adalgiso Amendola & Roberto Dell’Anno, 2014. "Income inequality and economic growth: an empirical investigation in Mediterranean countries," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - Italian Review of Economics, Demography and Statistics, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 68(2), pages 35-58, April-Jun.
    3. Leyaro Vincent, 2015. "Threshold and Interaction Effects in the Trade, Growth, and Inequality Relationship," WIDER Working Paper Series 009, World Institute for Development Economic Research (UNU-WIDER).
    4. Charles-Coll, Jorge A., 2010. "The optimal rate of inequality: A framework for the relationship between income inequality and economic growth," MPRA Paper 28921, University Library of Munich, Germany.
    5. Jorge Alberto Charles Coll, 2014. "Inequality and growth in the context of the Mexican economy: Does inequality matter for growth?," Working Papers 331, ECINEQ, Society for the Study of Economic Inequality.

    More about this item

    Keywords

    employment growth; inequality; spatial dependence; Community/Rural/Urban Development; R0; R11; O15; D30;

    JEL classification:

    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • D30 - Microeconomics - - Distribution - - - General

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