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Distributional Impact of the American Recovery and Reinvestment Act-- A Microsimulation Approach


  • Ajit Zacharias
  • Thomas Masterson
  • Kijong Kim


Over the last two decades, those at the bottom of the income scale have seen their incomes stagnate, while those at the top have seen theirs skyrocket; without intervention, the recession that began in December 2007 was likely to exacerbate this trend. Will the American Recovery and Reinvestment Act of 2009 (ARRA) be able to keep the situation from getting worse for those at the bottom of the income scale? Will ARRA reverse the upward trend in inequality that we've seen in the recent past? The authors of this new working paper employ a microsimulation of ARRA to address these questions. They find that, despite a large amount of job creation, ARRA is likely to have little impact on overall income inequality, or on the income gaps between relatively advantaged and disadvantaged groups.

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  • Ajit Zacharias & Thomas Masterson & Kijong Kim, 2009. "Distributional Impact of the American Recovery and Reinvestment Act-- A Microsimulation Approach," Economics Working Paper Archive wp_568, Levy Economics Institute.
  • Handle: RePEc:lev:wrkpap:wp_568

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    References listed on IDEAS

    1. Rebecca M. Blank, 1991. "Why Were Poverty Rates So High in the 1980s?," NBER Working Papers 3878, National Bureau of Economic Research, Inc.
    2. Easterlin, Richard A & Macdonald, Christine & Macunovich, Diane J, 1990. "How Have American Baby Boomers Fared? Earnings and Economic Well-Being of Young Adults, 1964-1987," Journal of Population Economics, Springer;European Society for Population Economics, vol. 3(4), pages 277-290, December.
    3. Susan E. Mayer & Christopher Jencks, 1989. "Poverty and the Distribution of Material Hardship," Journal of Human Resources, University of Wisconsin Press, vol. 24(1), pages 88-114.
    4. Katharine L. Bradbury, 1986. "The shrinking middle class," New England Economic Review, Federal Reserve Bank of Boston, issue Sep, pages 41-55.
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    Cited by:

    1. Rania Antonopoulos & Kijong Kim & Thomas Masterson & Andajit Zacharias, 2010. "Why President Obama Should Care About 'Care': An Effective and Equitable Investment Strategy for Job Creation," Economics Public Policy Brief Archive ppb_108, Levy Economics Institute.
    2. Thomas Masterson, 2014. "Quality of Statistical Match and Employment Simulations Used in the Estimation of the Levy Institute Measure of Time and Income Poverty (LIMTIP) for South Korea, 2009," Economics Working Paper Archive wp_793, Levy Economics Institute.
    3. Alma Kudebayeva, 2012. "Effects of Crisis on Income and Poverty: The Case of Kazakhstan," wiiw Balkan Observatory Working Papers 102, The Vienna Institute for International Economic Studies, wiiw.
    4. Rania Antonopoulos & Kijong Kim & Tom Masterson & Ajit Zacharias, 2010. "Investing in Care: A Strategy for Effective and Equitable Job Creation," Economics Working Paper Archive wp_610, Levy Economics Institute.
    5. Thomas Masterson, 2012. "Simulations of Full-Time Employment and Household Work in the Levy Institute Measure of Time and Income Poverty (LIMTIP) for Argentina, Chile, and Mexico," Economics Working Paper Archive wp_727, Levy Economics Institute.

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