Income Inequality, Human Capital, and Income Growth: Evidence from a State-Level VAR Analysis

Frank, Mark W.

doi:10.1007/s11293-009-9172-z

Cited by 15 publications

(12 citation statements)

References 21 publications

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“…Only in one case inequality mildly affects growth negatively in the short run, that is when we limit our sample for the 1969–2007 period. Finally, the apparent cross‐state heterogeneity broadly confirms the findings of Atems () and other research, which conclude in favor of varying spatial inequality effects throughout the United States (Chintrakarn, Herzer, and Nunnenkamp ; Frank ).…”

Section: Robustness Analysissupporting

confidence: 84%

Inequality and Growth in the United States: Why Physical and Human Capital Matter

Benos

Karagiannis²

2017

Economic Inquiry

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We investigate the relationship between economic growth and top income inequality under the influence of human and physical capital accumulation, using an annual panel of U.S. state‐level data. Our analysis is based upon the “unified” framework offered by Galor and Moav (2004) while the empirics account for cross‐section dependence, parameter heterogeneity, and endogeneity, in nonstationary series. We conclude that changes in inequality do not influence growth, neither in the short run nor in the long run in the United States as a whole in the 1929–2013 period. Our findings are robust to the inclusion of overall income inequality measures. These findings provide support for the theoretical prediction of the unified theory of inequality and growth, according to which the growth effect of inequality becomes insignificant in the latest stages of economic development that the United States experiences during our period of investigation. Therefore, future policies aiming at moderating the concentration at the upper end of income distribution are not likely to have adverse growth consequences in developed countries such as the United States. (JEL I21, O47, C23)

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Section: Robustness Analysissupporting

confidence: 84%

Inequality and Growth in the United States: Why Physical and Human Capital Matter

Benos

Karagiannis²

2017

Economic Inquiry

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“…In addition to reflecting potential changes in the quality of life in the local area, the magnitude of the expression likely depends on overall amenity demand nationally, which has risen with increased national income and wealth (Graves, 1980; Cragg and Kahn, 1999; Costa and Kahn, 2003; Rappaport, 2007). To be sure, real per capita income grew significantly in the 1990s, in which the top 10 percent of income earners’ share of income increased dramatically to 43 percent (Frank, 2009), providing a potentially significant source of increased amenity demand.…”

Section: Resultsmentioning

confidence: 99%

Population Growth in High-Amenity Nonmetropolitan Areas: What's the Prognosis?*

Rickman,

Rickman

2011

Journal of Regional Science

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This paper examines the continued strong population growth in U.S. nonmetropolitan areas possessing high levels of natural amenities during the 1990s and the reasons for near convergence of growth across the top tiers of the amenity hierarchy. Based on estimated parsimonious spatial hedonic growth regressions, strong demand for high-amenity areas continued in the 1990s, but the converging of population growth across the top tiers appeared related to capitalization of amenity differences among the tiers into factor prices. Yet, evidence obtained from controlling for spatial effects suggests that the relative quality of life in the top two tiers had deteriorated.

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“…A positive inequality‐growth link was also found when the two measures were included simultaneously, i.e., when the parameter of the gini reflected the effects of inequality in the tails of the distribution. Frank (, ) partly supported the latter finding, showing a positive association between growth and income share of the top decile when exploring data on gross income in US states 1940–1990. In contrast, Panizza () did not find any evidence of a positive association between the gini or Q3 (or both) and growth across US states 1940–1980 .…”

Section: Earlier Literaturementioning

confidence: 86%

The Shape of the Income Distribution and Economic Growth – Evidence from Swedish Labor Market Regions

Rooth¹,

Stenberg

2012

Scottish J Political Eco

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 5486 February 2011 ABSTRACT The Shape of the Income Distribution and Economic Growth: Evidence from Swedish Labor Market RegionsWe analyze the association between inequality and growth across 72 labor market regions in Sweden 1990Sweden -2006. Highly accurate measures of growth and inequality (gini, Q3, p9075, p5010) are derived from population register data. The regional set-up also reduces problems with omitted variable bias and endogeneity found in cross country comparisons since the regions within a country share the same redistributive policies and institutions. The findings suggest that inequality between the 90 th and 75 th percentiles enhances regional growth. This result no longer holds when we take into account changes in commuting patterns. Although only suggestive, the finding is interesting in that it is consistent with the hypothesis that inequality enhances growth by stimulating commuting incentives. JEL Classification:O4, D3, J6

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Income Inequality, Human Capital, and Income Growth: Evidence from a State-Level VAR Analysis

Abstract: Income inequality, Economic growth, Human capital, U.S. states, D60, I00, O40, R10,

Cited by 15 publications

References 21 publications

Inequality and Growth in the United States: Why Physical and Human Capital Matter

Inequality and Growth in the United States: Why Physical and Human Capital Matter

Population Growth in High-Amenity Nonmetropolitan Areas: What's the Prognosis?*

The Shape of the Income Distribution and Economic Growth – Evidence from Swedish Labor Market Regions

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