A NOTE ON THE DIFFERENTIAL REGIONAL EFFECTS OF INCOME INEQUALITY: EMPIRICAL EVIDENCE USING U.S. COUNTY-LEVEL DATA
Article first published online: 19 AUG 2013
© 2013 Wiley Periodicals, Inc.
Journal of Regional Science
Volume 53, Issue 4, pages 656–671, October 2013
How to Cite
Atems, B. (2013), A NOTE ON THE DIFFERENTIAL REGIONAL EFFECTS OF INCOME INEQUALITY: EMPIRICAL EVIDENCE USING U.S. COUNTY-LEVEL DATA. Journal of Regional Science, 53: 656–671. doi: 10.1111/jors.12053
- Issue published online: 18 SEP 2013
- Article first published online: 19 AUG 2013
- Manuscript Revised: FEB 2013
- Manuscript Accepted: FEB 2013
- Manuscript Received: MAR 2012
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.