Laboratories of (In)equality? Redistributive Policy and Income Inequality in the American States

Prior literature has emphasized demographic, economic, and political explanations for increasing income inequality in the United States, with little attention paid to the role of state‐level policy. This is despite great variation across states in both the level of inequality and the rate at which it is rising. This paper asks whether differences in state policy choices can help explain this variation; specifically, we examined a range of state redistributive policies enacted between 1980 and 2005 and identified four common approaches likely to impact inequality: taxes on the wealthy, taxes on the poor, spending on the poor, and labor market policies. We used pooled cross‐sectional time‐series data and a fixed‐effects model to assess the relationship between states’ use of each policy approach and two measures of market income inequality: the Gini coefficient and the income share of the top 1 percent. We find policies played a significant role in shaping income inequality in the states. For three of these four policy approaches, we found less inequality following expansions of state redistributive policy. Yet, for another, we identified the opposite pattern. These findings highlight the importance of state policy choices in shaping market inequality, and have implications for designing state policies to reduce income inequality since the success of these efforts depends on the policy approach used to redistribute income and wealth.     

Typologies of Advantage and Disadvantage: Socio‐economic Outcomes in Australian Metropolitan Cities

Australia's metropolitan cities have undergone significant social, economic and demographic change over the past several decades. In terms of socio‐economic advantage and disadvantage these changes, which are often associated with globalisation, wider economic and technological restructuring, the changing demographics of the population and shifts in public policy are not evenly dispersed across cities, but represent a range of often contrasting outcomes. The current paper develops a typology of socio‐economic advantage and disadvantage for locations across Australian metropolitan cities. More specifically, the paper takes a range of Australian Bureau of Statistics data and uses a model‐based approach with clustering of data represented by a parameterised Gaussian mixture model and discriminant analysis utilised to consider the differences between the clusters. These clusters form the basis of a typology representing the range of socio‐economic and demographic outcomes at the local community level.     

Political Economy of Income Distribution: A Comparative Study of Taiwan and Mexico

Both Taiwan and Mexico have experienced remarkable economic growth since the 1960s. Taiwan demonstrates that higher income level can be accompanied by falling income inequalities. However, unlike Taiwan, the course of economic growth in Mexico has left the country with a very unequal distribution of income. This paper compares the government policies of income distribution in Mexico and Taiwan and identifies the factors contributing to the success of Taiwan and to the highly uneven income distribution in Mexico. The paper concludes that market-oriented growth does not automatically reduce inequality or poverty. The prospects for better income equity and sustainable economic development would be greatly enhanced through implementation of policies aimed at redistributing land and skills, facilitating small enterprises, and increasing domestic saving.     

INEQUALITY IN CITIES*

ABSTRACT Much of the inequality literature has focused on national inequality, but local inequality is also important. Crime rates are higher in more unequal cities; people in unequal cities are more likely to say that they are unhappy. There is a negative association between local inequality and the growth of city‐level income and population, once we control for the initial distribution of skills. High levels of mobility across cities mean that city‐level inequality should not be studied with the same analytical tools used to understand national inequality, and policy approaches need to reflect the urban context. Urban inequality reflects the choices of more and less skilled people to live together in particular areas. City‐level skill inequality can explain about one‐third of the variation in city‐level income inequality, while skill inequality is itself explained by historical schooling patterns and immigration. Local income also reflects the substantial differences in the returns to skill across, which are related to local industrial patterns.     

The Occupy Movement and the Top 1% in Canada

The Occupy movement catalyzed public debate on the issue of growing income inequality. This paper examines recent patterns of inequality in Canada, paying particular attention to changes in the characteristics of the top 1% of income earners. At the national level, the gap between the top percentile and the other 99% has widened considerably: in 2006, 11% of the nation's income was concentrated in the hands of top earners (whose mean income of $344,000 is 11 times that of the average Canadian) compared with 7.7% just 15 years earlier. Beneath such national‐level figures lie important geographical differences in the income hierarchy: the thresholds, average incomes and socio‐economic characteristics of the top 1% vary widely across provinces and cities. Among the most important spatial shifts observed is the growing concentration of high‐income groups in energy‐rich Western Canada, where Calgary has become the most unequal city in the country.     

INCOME INEQUALITY,ECONOMIC GROWTH,AND THE DISTRIBUTION OF INCOME GAINS: EVIDENCE FROM THE U.S. STATES*

ABSTRACT This paper first investigates a relationship between economic growth and income inequality using U.S. states data, a state cost‐of‐living deflator, and nonlinearity. It then explores the distribution of income gains among different income groups. We find that the impact of inequality on growth is nonlinear. Lowering inequality or increasing it substantially reduces growth; thus stable inequality may be good for growth. Economic growth affects incomes of the poor, the middle‐income group, and the rich similarly with the elasticity of one. Education and labor market policies become important in promoting growth and improving income gains of the poor.     

Inclusive growth from an urban perspective: a challenge for the metropolis of the twenty-first century

This paper addresses the study of inclusive growth from an urban perspective. It proposes to focus the relationship between urban economic growth and income distribution in cities in which manufacturing production and external demand play a central role. Opposed to the literature that considers economic growth leads to an increase in inequality in income distribution, we present some operative economic tools from Marshallian Industrial Districts theory and from urban economic theory with which to develop an economic strategy for inclusive urban growth, making possible to achieve simultaneously economic growth and improvements in income distribution. An interesting example of a metropolis with a dynamic of economic and employment growth compatible with a reduction in income inequality is provided by Barcelona. This metropolis disposes a Survey of living conditions and habits of the population since 1986 that allows an analysis in terms of inclusive urban growth.     

The Challenge of Change: Australian Cities and Urban Planning in the New Millennium

This paper reviews recent research on the changing spatial structure of Australia's major cities from the early 1990s, concentrating on (a) the location of employment and journey to work patterns, (b) the changing nature of housing, and (c) patterns of residential differentiation and disadvantage. The paper argues that the 1990s was a watershed decade during which some taken‐for‐granted aspects of Australian urban character experienced significant change. It then examines the latest generation of strategic planning documents for these major metropolitan areas, all published between 2002 and 2005, and argues that there is a mismatch between the strategies’ consensus view of desirable future urban structure, based on containment, consolidation and centres, and the complex realities of the evolving urban structures. In particular, the current metropolitan strategies do not come to terms with the dispersed, suburbanised nature of much economic activity and employment and the environmental and social issues that flow from that, and they are unconvincing in their approaches to the emerging issues of housing affordability and new, finer‐grained patterns of suburban inequality and disadvantage. Overall, the paper contends that current metropolitan planning strategies suggest an inflexible, over‐neat vision for the future that is at odds with the picture of increasing geographical complexity that emerges from recent research on the changing internal structure of our major cities.     

Mapping schools' NAPLAN results: a spatial inequality of school outcomes in Australia

This article identifies spatial dimensions of educational outcomes using maps of the 2016 Grade 5 reading results for Australia's National Assessment Program–Literacy and Numeracy for all Australian schools. A geographical information system (GIS) was used to overlay schools' results onto suburbs' advantage or disadvantage to visualise spatial patterns. We then examined the extent to which school results “cluster” in socio‐economically advantaged and disadvantaged suburbs and considered the consistency of spatial patterns for results across major cities. That work illustrates both how GIS can foreground educational inequality and how “the spatial” is more than corollary for student socio‐economic status. Results show substantial differences between urban and remote areas and towns of different size. Maps of cities visualise spatial “clustering” patterns of school results, with most schools in advantaged suburbs having high results and almost no schools in disadvantaged suburbs having high results. Educational outcomes strongly align to local socio‐demographic characteristics, and parallel host communities’ levels of advantage or disadvantage. Differences between public and private schools are less significant than within‐sector differences for schools in advantaged or disadvantaged locales. Patterns in all cities are consistent—schools in advantaged suburbs predominantly have high results, whereas non‐government schools generally perform better than government schools in disadvantaged suburbs. Most concerning is the persistent and increasing trajectory of results in advantaged, and more so in disadvantaged suburbs, of all cities since the first National Assessment Program–Literacy and Numeracy in 2008. Ameliorating spatial inequality between primary schools is one of the greatest challenges for Australians.     

Residential property disparities in city districts in Prague,Czech Republic

City districts are often classified as ‘rich’ or ‘poor,’ a phenomenon that occurs within cities all over the world. While income inequality, wealth inequality, and other kinds of social inequality are frequently tracked, there is a surprising lack of research concentrating on how social inequality manifests as differences between parts of cities, especially outside of the U.S. That is mostly due to insufficient available data. In this paper, we propose a methodology for measuring the relative inequality between city districts by using the average prices of residential properties in various parts of the city, and assessing their relative difference. This approach has several advantages, as property listings are often readily available even in cities where income data is not. This methodology has potential for measuring developments in inequality in a much wider range of cities. As a proof of concept, we apply this methodology to property prices in Prague during the period 2003–2012 to identify a trend of either growing or decreasing inequality among individual parts of the city. We have found that during this period the disparity has grown only 5.97%, which means the overall growth of disparity between the city districts was negligible.     

Beyond Kuznets: Inequality and the size and distribution of cities

As countries develop the percentage of population living in urban areas tends to increase. As this happens, inequality is expected first to increase and then to decline in what is known as the Kuznets inverted‐U. But the literature has not paid much attention to differences in the absolute size of cities potentially affecting economy‐wide inequality. Building on insights from the urban economics literature, this paper studies the relationship between the size and distribution of cities and income inequality at country level. Results show that beyond Kuznets’ hypothesis there is a U‐shaped relationship between average city size and inequality; inequality first falls and then increases with average city size. This result is robust to a long list of controls, different estimation techniques, and identification strategies.     

Politics,income perceptions and living standards

Political and economic debates over community living standards, poverty and economic inequality often pay little attention to the subjective and socially conditioned aspects which influence public perceptions of material wellbeing. An attempt to explore the latter involved asking a national sample of Australian voters in 1988 to estimate the minimum weekly income on which they could ‘just make ends meet’. The amounts nominated varied not only according to the financial and domestic circumstances of respondents, but also with their age, education, housing situation and political affiliation. The relationships between these variables and the ‘making ends meet’ income level are estimated statistically and their implications explored with the help of several illustrative examples. Some speculations are offered as to what these results say about the social meaning of income levels and possible implications for public policy.     

Dimensions and dynamics of residential segregation by income in urban Canada, 1991–1996

This paper examines the trends in residential segregation by income (post-transfer, pretax income) in the thirty-nine largest Canadian urban areas between 1991 and 1996. The study is motivated by the relative lack of attention paid to residential segregation by income in the Canadian context and by conceptual arguments linking compromised life chances and increased social tensions for the populations of highly segregated cities. We investigated several dimensions of segregation using five different measures (we focus on three of these here given the correlation structure of the measures) to examine changes in segregation between 1991 and 1996, a period characterised by economic recession, cutbacks in social programs and a widening of inequality in market incomes at the national scale. Overall, income segregation increased in most urban areas across all dimensions of segregation during the time period, with particularly high degrees of segregation observed in prairie cities (Winnipeg, Saskatoon and Regina). Of the three largest metropolitan areas (Vancouver, Toronto and Montréal), Montréal was the most consistently segregated. We also find that increases in spatial separation and spatial concentration by income occurred despite the fact that at the national scale, the tax and transfer system appeared to be adequately redressing a rise in inequality in labour and market incomes (as demonstrated by the lack of change in post-transfer national income inequality measures during a period when inequality in market and labour incomes rose sharply). This implies that the lived experience of changes in income distribution are unlikely fully captured by aspatial, national-scale measures and that intra-urban measures with a spatial dimension are an important indicators of inequality in Canadian society.     

Investigating Private Motorised Travel and Vehicle Fleet Efficiency: Using New Data and Methods to Reveal Socio‐Spatial Patterns in Brisbane,Australia

Australian cities have seen continued long‐term growth in private motor vehicle travel that has imposed increasing vehicle energy consumption and greenhouse gas emissions. This paper investigates the spatial patterns of vehicle energy consumption on urban areas through an analysis of vehicle travel and of vehicle fleet efficiency in Brisbane, Australia. This is achieved by combining motor vehicle registration records and Australian government's ‘Green Vehicle Guide’ of vehicle fuel efficiency database. The results of a spatial analysis of the private vehicle trip distances derived from journey to work data and fuel energy consumption associated with the private‐owned vehicles decomposed to local areas show that private vehicle energy use tends to increase with increasing distance from the city centre (e.g. central business district). This analysis demonstrates that differences in vehicle trip distances and lower proportions of high‐efficiency vehicles in the outer suburbs aggravate vehicle energy consumption in those locations. The paper further compares vehicle energy use results for Brisbane against spatial patterns of suburban socio‐economic disadvantage. The paper demonstrates that access to vehicle fleet technology may compound other forms of socio‐economic disadvantage and vulnerability.     

The Impact of Local Environmental Advocacy Groups on City Sustainability Policies and Programs

American cities vary considerably in the degree to which they pursue sustainability. What explains this variation? One plausible cause of such differences is that sustainability may be more appealing to high‐income cities than to more economically challenged cities. Yet such strict economic determinism seems simplistic and removes politics from an inherently political process. The hypothesis here is that any such relationship between income and commitment to sustainability is conditioned by a city's level of environmental advocacy. The data utilized in this analysis are derived from two large‐scale data sources. One is a comprehensive inventory of sustainability programs and policies in 50 large American cities. The other is a set of surveys in those same 50 cities. The multivariate model supports the hypothesis. Controlling for income growth and the predisposition of policymakers to be supportive of sustainability (as well as other alternative explanations), a city's commitment to sustainability is strongly linked to the advocacy of environmental and sustainability groups in the policymaking process. The example of Sustainable Seattle is used to illustrate the linkages that would seem to underlie the statistical analysis.     

Spatial Inequality Between and Within Urban Areas: The Case of Israeli Cities

Central areas enjoy greater efficiency in the production of goods and services than do outlying areas. Because of the inherent advantages of central areas over outlying areas, disparities among regions do not vanish over time. On the contrary, centripetal forces increase inequalities across space. The phenomena of increased globalization, trade liberalization and treaties among countries not only enable the flow of labour, products (export) and foreign direct investment but also help reduce spatial inequality between countries. These phenomena also induce greater spatial economic concentration within a country. Thus, although disparities among countries decrease, a widening gap is observed between regions within countries and within large urban areas. In the empirical part, we analyse the general patterns of spatial inequality found among 55 localities in Israel with population size over 20,000. Looking at the spatial inequality relationship, both within and between cities in Israel, we show how all economic indicators measured, including inequality, decrease with distance from the core. Localities in the periphery that experience greater equality also experience lower average income, lower education, less self-employment and more unemployment.     

Income Inequality,Welfare and Poverty in Ukraine

Ukraine is now faced with economic crisis on an unprecedented scale. The country is on the brink of hyperinflation. The government has to follow rigorous demand management policies which entail lowering the standard of living of the population. To design policies which protect the poorest and most vulnerable groups in the society, it is important to understand the nature of poverty and income inequality. This study attempts to do exactly this for Ukraine for the first time. The paper demonstrates that the standard of living in Ukraine has been falling at an alarming rate. The government welfare programmes are ineffective in protecting the poorest and most vulnerable groups in the society. This article provides an empirical basis to design appropriate policies, but a lot more work needs to be done.     

Rising Inequality in an Era of Austerity: The Case of the US

US inequality has rapidly increased since the early 1970s. For advanced economies, inequality is linked to stronger incentives that enhance growth, education, innovation and entrepreneurship. However, the rise in US inequality is concentrated in the top 1%. Hence it is increasingly possible that economic rewards may be too uncertain to promote effort, suggesting the US has crossed a tipping point in which inequality reduces growth. Other costs include more social and political instability, making inequality the next potential “crisis” facing America. This study first examines trends in inequality and then reviews arguments that suggest that it is both good and bad for growth in America's cities. We then provide evidence that there has been a reversal in the effects of inequality after 2000 with it now being associated with less income and job growth in US metropolitan areas. We conclude by arguing that no general solution is possible without significant political reforms that equalize political influence.     

Planning strategies and practices in non-core regions: a critical response

ABSTRACT

The development of non-core regions has attracted growing interest within the current debates of economic geography, regional studies and spatial planning. The divergence between economically successful core regions and less privileged non-core regions continues despite policy interventions aimed at tackling spatial disparities and income inequalities. While traditional growth-oriented policies raise concerns over their effectiveness and relevance beyond large cities and metropolitan regions, there is growing interest in exploring new research paths and policy options that are better able to address development challenges in non-core regions. Contributors to this special issue engage with these debates by reflecting on planning policies and practices in five European countries, paying special attention to identifying planning strategies for non-core regions. This paper argues that alternatives to growth-oriented models require additional conceptualization and analysis to translate values into policies and institutions.     

A PATH ANALYTIC EXPLORATION OF INCOME CLUSTERING AND LOCAL INEQUALITY

This article explores relationships among income status, economic resources, service needs, and taxing policies for municipalities and schools in 39 metropolitan suburbs of the Milwaukee SMSA. The results indicate some modest support for those who are concerned about the impact of class and income clustering, as well as government fragmentation, on inequalities regarding local tax policy. Use of path analysis to explore some of the possible alternative linkages that account for patterns of fiscal inequality among suburban municipalities shows that fiscal disparities resulting from income clustering by jurisdiction is only partially attributable to resourse and need inequities. It might also be that income status, reflecting differing service preferences, operates directly to generate inter municipal fiscal disparities.