A NOTE ON THE DIFFERENTIAL REGIONAL EFFECTS OF INCOME INEQUALITY: EMPIRICAL EVIDENCE USING U.S. COUNTY‐LEVEL DATA

This note examines the correlation between income inequality and economic growth using a panel of income distribution data for 3,109 counties of the U.S. Using the System Generalized Method of Moments (GMM) approach, we find that for the entire sample of 3,109 counties, an increase in a county's level of inequality has a significant negative relationship with future economic growth. In reality, however, the magnitude, sign, and significance of this relationship is not necessarily uniform across all regions of the U.S., motivating the need to examine regional differentials in the relationship between inequality and growth. Consequently, we split our dataset into metropolitan and nonmetropolitan counties, into the eight Bureau of Economic Analysis regions, and into regions of different political affiliation and economic‐dependence typology. Our results show considerable heterogeneity in the relationship between inequality and growth across these regions.     

EDUCATION AND INCOME INEQUALITY IN THE REGIONS OF THE EUROPEAN UNION*

ABSTRACT This paper provides an empirical study of the determinants of income inequality across regions of the EU. Using the European Community Household Panel dataset for 102 regions over the period 1995–2000, it analyses how microeconomic changes in human capital distribution affect income inequality for the population as a whole and for normally working people. The different static and dynamic panel data analyses conducted reveal that the relationship between income per capita and income inequality, as well as between a good human capital endowment and income inequality is positive. High levels of inequality in educational attainment are also associated with higher income inequality. The above results are robust to changes in the definition of income distribution and may be interpreted as a sign of the responsiveness of the EU labor market to differences in qualifications and skills. Other results indicate that population ageing, female participation in the labor force, urbanization, agriculture, and industry are negatively associated to income inequality, while unemployment and the presence of a strong financial sector positively affect inequality. Finally, income inequality is lower in social‐democratic welfare states, in Protestant areas, and in regions with Nordic family structures.     

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.     

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,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.     

Spatial and social mobility

This paper analyzes the relationship between spatial mobility and social mobility. It develops a two‐skill‐type spatial equilibrium model of two regions with location preferences where each region consists of an urban area that is home to workplaces and residences and an exclusively residential suburban area. The paper demonstrates that relative regional social mobility is negatively correlated with segregation and inequality. In the model, segregation, income inequality, and social mobility are driven by differences between urban and residential areas in commuting cost differences between high‐skilled and low‐skilled workers, and also by the magnitude of taste heterogeneity.     

Gambling and Income Inequality in the States

Since the early 1970s, income inequality in the United States has increased dramatically. We examine the impact of gambling on income inequality in the American states from 1976 to 1995. Using state-level data over time to evaluate the effects of various types of legalized gambling, from slot machine parlors to lotteries, we find clear evidence that lotteries foster inequality but no evidence of a similar effect for other types of gambling. These results suggest that the increasing prevalence of various forms of nonlottery gambling will have little effect on income inequality.     

20世纪30年代中国农业雇工收入地区差异研究

本文采用卜凯1929—1933年所做的中国农村调查数据,用基尼系数法计算了我国不同地区农业雇工平均收入水平及差距,并采用非参数的高斯核密度估计方法分析农业雇工收入分布情况及影响机制。研究表明:20世纪30年代农业雇工收入水平地区差异性客观存在但并未出现两极分化;农业雇工平均收入水平按地区发展状况呈阶梯状递减趋势,地区内部农业雇工收入差距与地区经济发达水平大体呈正U型发展态势;东、中、西部地区之间发展的不均衡性是导致全国农业雇工收入差距较大的重要因素。     

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.     

Poverty Reduction and Good Governance: Examining the Rationale of the Millennium Development Goals

Whilst the deadline for achieving the Millennium Development Goals (MDGs) looms large, the outcomes so far have been mixed. This article examines the policy logic that ‘good governance’ leads to poverty reduction, which has been adopted by international agencies in pursuit of the MDGs. This causal relationship is examined through an empirical panel‐data estimation using Worldwide Governance Indicators and the poverty headcount ratio in ninety‐eight countries. The empirical evidence does not support the hypothesis that good governance leads to poverty reduction. Good governance alleviates poverty only in middle‐income countries, not in least developed ones. These findings point to the necessity to devise policies that address poverty directly, rather than through indirect instruments, and highlight the urgent need to address structural inequality in developing countries.     

Urbanization and Socioeconomic Status in the European Regions: The Role of Population Ageing and Capital City Regions

Using the European Community Household Panel data survey and confirmatory factor analysis, this paper explores the causal relationship between the multidimensional concepts of urbanization and socioeconomic status in the European Union. It shows that income, education and occupation are strongly related to status, and the density of population area and the town size, to urbanization. The relationship between urbanization and status is positive. This means that urban areas contain the residences of the elite, such as the rich, those with high levels of educational attainment and people with high-calibre jobs. This paper does not provide evidence to support the idea that individuals lose socioeconomic status as they age and that status is higher in capital city regions. The relationship between urbanization and status is relatively stronger for the old working-age cohort and for the non-capital city regions. These results have policy implications with regard to social welfare and urban and regional planning and development.     

Migration and regional inequality: changing characteristics of China’s economic inequality

Scholars studying economic inequality in China have maintained that regional inequality and economic divergence across provinces have steadily increased over the past 30 years. New studies have shown that this trend is a statistical aberration; calculations show that instead of quickly and sharply rising, regional inequality has actually decreased, and most recently, remained stable. Our study suggests that China’s unique migratory regime is crucial to understanding these findings. We conduct a counterfactual simulation to demonstrate how migration and remittances have mitigated income inequality across provinces in order to show that without these processes, we would have seen more of a rise in interprovincial income inequality. We conclude by arguing that inequality in China is still increasing, but it is changing and becoming less place-based. As regional inequality decreases, there are signs that point to the increasing importance of interpersonal inequality.     

Is it time to start worrying more about growing regional inequalities in Canada?

Much has been written recently about the rise of within-country inequality and growing imbalances of regional fortunes in the United States and the European Union. In this paper, we apply a novel geo-visualization technique that combines local indicators of spatial association with directional statistics to a unique dataset in order to explore the spatial dimensions of regional income inequalities in Canada from 1981 to 2016. After describing a pattern of growing spatial divergence among regions, we briefly discuss the need for the federal government to explore new types of place-sensitive development policies.     

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.     

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.     

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.     

Regional income inequality in France 1860–1954: Methods and findings

This paper explores regional (département or NUTS3) income inequality in France between 1860 and 1954. To this end we first document the existing evidence, evaluate the estimation methods and findings, assess the suitability of each approach and address potential concerns. We then present our own subnational estimates of per-capita income, derived following Geary and Stark. Overall, we find that indirect estimation (or top-down) methods provide somewhat differing results, thereby calling into question the validity of some of these approaches. Our estimates, meanwhile, appear to fit reasonably well with direct estimations (or bottom-up) of value-added and income and provide evidence in support of a decline in regional inequality over the period of study.     

Scales of regional income disparities in the USA, 1955 2003

This article examines multiple dimensions of regional per capitaincome disparities in the USA between 1955 and 2003 with a particularfocus on scalar effects. It combines various exploratory analyticaltools of spatial disparities, including inequality indices,mobility indices, kernel density estimation, spatial autocorrelationstatistics and scale variances, to analyse regional averageper capita income distributions at multiple spatial scales,ranging from counties to multi-state regions. The analysis revealspreviously unrecognised systematic patterns of cross-scalardynamics, whereby spatial income disparities are increasinglymore pronounced at smaller scales in the last few decades.     

TRENDS IN NEIGHBORHOOD INCOME INEQUALITY IN THE U.S.: 1980–2000*

ABSTRACT This paper reports evidence on the geographic pattern of income inequality, both within and between neighborhoods, across a sample of 359 U.S. metropolitan areas between 1980 and 2000. The results indicate that overall income inequality within a metro area tends to be driven by variation within neighborhoods, not between them, although we find that between‐neighborhood differences rose dramatically during the 1980s and subsided somewhat during the 1990s. While this trend is similar to what existing research has found, our findings reveal potentially important differences in the magnitudes of the changes depending on whether neighborhoods are defined by block groups or tracts.