Income Inequality across Micro and Meso Geographic Scales in the Midwestern United States, 1979–20091

This article examines the spatial distribution of income inequality and the socioeconomic factors affecting it using spatial analysis techniques across 16,285 block groups, 5,050 tracts, and 618 counties in the western part of the North Central Region of the United States. Different geographic aggregations result in different inequality outcomes, suggesting spatial scale needs to be carefully considered in inequality research. Inequality is spatially clustered in suburban areas of larger metro areas and around Native American reservations in the Dakotas. Higher inequality is associated with better socioeconomic conditions, counter to the social inequality literature but consistent with the inequality growth literature. However, growing inequality is associated with worse socioeconomic outcomes. Results partially support the polarization thesis that declines in industrial sectors and growth in services has caused incomes to diverge. Higher and growing inequality is associated with both low‐skill and high‐skill services jobs. However, employment in agricultural and industrial sectors experiencing large losses over the past three decades is also linked to higher and growing inequality. This suggests a dual process where many former agricultural and industrial workers are now employed in other sectors at lower wages, while the remaining workers in these sectors earn higher and growing wages.     

INCOME INEQUALITY: THE IMPLICATIONS OF ECONOMIC STRUCTURE AND SOCIAL CONDITIONS

During the past few decades income inequality has been increasing in the United States and other developed nations, and is having major social consequences. In this study county-level data for the United States was analyzed to test the relative importance of three alternative approaches for explaining increased levels of inequality. These three approaches include economic structure, social conditions, and a model that maintains that both social conditions and inequality are a function of economic structure. The results revealed that social conditions were much more strongly related to inequality than economic structure and little support was found for the theoretical model. The two social conditions most strongly related to inequality included female employment and the percent of female-headed households. Counties with high levels of female employment tended to have low levels of inequality, while counties with high proportions of female-headed households tend to have high levels of inequality. The implications of these findings are discussed.     

Enhancing parental power and flexibility in the transition from welfare to work

Recent welfare reforms in the United States shifted the emphasis from income maintenance to preparation for employment. Many families receiving welfare benefits have members with disabilities, which can complicate the process of transition into the workforce. Rehabilitation professionals have a unique set of skills, expertise and experiences which could enhance work transition outcomes for welfare recipients. This purpose of this article is to (a) familiarize rehabilitation professionals with welfare reform changes in the United States, (b) summarize the experiences of families affected by those changes who participated in a recent study, and (c) present a service delivery model to enhance parental power and flexibility based on rehabilitation principles.     

FDI AND INCOME INEQUALITY: EVIDENCE FROM A PANEL OF U.S. STATES

This study employs state‐level panel data to explore the relationship between inward foreign direct investment (FDI) and income inequality in the United States. Using panel cointegration techniques that allow for cross‐sectional heterogeneity and cross‐sectional dependence, we find that, in the long run, FDI exerts a significant and robust negative effect on income inequality in the United States. This result for the United States as a whole does not imply that FDI narrows income gaps in each individual state. There is considerable heterogeneity in the long‐run effects of FDI on income inequality across states, with some states (21 out of 48 cases) exhibiting a positive relationship between FDI in income inequality.(JEL F21, D31, C23)     

INEQUALITY AND GROWTH IN THE UNITED STATES: WHY PHYSICAL AND HUMAN CAPITAL MATTER

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)     

Income distributions,labour market sectors and the Goldschmidt hypothesis: the nonmetropolitan United States in 1970 and 1980

Local social structures are not simply their national counterparts writ small. There are autonomous, locality-specific influences which have a significant bearing on variations in socio-economic conditions. To show this. this paper concentrates on two measures of income distribution — family/household income inequality and poverty rates. Drawing on data from a one-in-six systematic sample of nonmetropolitan U.S. counties for 1970 and 1980, variations in these conditions are evaluated in the context of labour market segmentation and Goldschmidt's ideas on the socio-economic consequences of large-scale farms. The direct effects of these causal forces are shown to be influenced by the employment structures of local labour markets. The most important determinants of income distribution differences within labour market types are shown to be monopoly sector employment, competitive sector employment, large farm holdings, nonwhite population compositions and location within the southern United States.     

The relationship between inequality and labor market performance: Evidence from U.S. states

A central issue facing society is the equity/growth trade-off. Conventional economic theory suggests enhanced incentives associated with income inequality should increase growth, but at the expense of “fairness.” Recent theories challenge this notion by contending that inequality reduces human-capital investment and increases instability. Nevertheless, empirical evidence from U.S. states and across countries suggests an ambiguous relationship between inequality and income growth. Yet, at the state level, because inequality is related to many disamenities including crime, it can lead to lower utility and out-migration. The disamenities may produce compensating differentials that increase income. Given the inconsistencies regarding income, this study extends the literature by instead examining employment growth. Namely, long-run job growth is closely associated with net migration and any utility gains from migration. Thus, examining relative employment growth indicates whether inequality is associated with netutility gains from a vibrant economy or net-losses from disamenities. The results suggest that state-level inequality is associated with greater long-run job growth, or enhanced incentives appear to be the dominant factor.     

Global interaction,global inequality,and migration of the highly trained to the United States

The authors "argue that national variation in the size of highly trained migration can be explained by interaction and inequality between nations, both reflecting the process of global integration. Guided by this analytical framework, we tested the structural determinants of highly skilled migration to the United States. The evidence confirms our hypotheses that economic and educational interactions between sending countries and the United States increase the flow of the highly trained to the United States. Results also provide mixed proof for our hypotheses that levels of professional migration are positively associated with disparities between sending countries and the United States in living conditions, research conditions, children's educational opportunities, political conditions, and professional employment opportunities."     

Gender and Employment: A Global Lens on Feminist Analyses and Theorizing of Labor Markets

This review of feminist analyses and theorizing of labor markets uses a global lens to reveal the forces shaping gender inequality. The review focuses on the increasing dominance of services primarily in the liberal market economies of the United States and the United Kingdom along with examples from Asia where restructuring has shifted locations of work and affected new ways of working by a diverse and mobile workforce. Labor market restructuring through commodification of care, outsourcing of household tasks and informalization of employment affects the complexity of relationships between and the interconnectedness of social inequalities transnationally and in global cities. Place matters when analyzing how service employment alters divisions of labor and how these labor market changes are gendered. Global restructuring not only poses new challenges but also creates new opportunities for mobilization around a more robust notion of equality.     

From Soviets to oligarchs: inequality and property in Russia 1905-2016

This paper combines national accounts, survey, wealth and fiscal data (including recently released tax data on high-income taxpayers) in order to provide consistent series on the accumulation and distribution of income and wealth in Russia from the Soviet period until the present day. We find that official survey-based measures vastly under-estimate the rise of inequality since 1990. According to our benchmark estimates, top income shares are now similar to (or higher than) the levels observed in the United States. We also find that inequality has increased substantially more in Russia than in China and other ex-communist countries in Eastern Europe. We relate this finding to the specific transition strategy followed in Russia. According to our benchmark estimates, the wealth held offshore by rich Russians is about three times larger than official net foreign reserves, and is comparable in magnitude to total household financial assets held in Russia.     

Social Democratic Programs: What Is Worth Modeling (for the United States)

This article argues that the United States could improve social welfare outcomes by adopting effective and efficient elements from nations that excel in social welfare areas of employment, education, health care and income support. Using secondary data for comparison the article explores four foreign model programs that are worth modeling for the United States, which include employment in Norway, education in Finland, and health care and income support in Sweden. Each program is framed within its national context and is qualitatively described and linked to three essential social democratic values: universalism, equality and comprehensiveness     

Growth with equity: income inequality in Vietnam, 2002–14

We use the 2002 through 2014 Vietnam Household Living Standards Surveys to construct comparable measures of household income and estimates of income inequality over this high-growth period. We focus on two questions: How have benefits from growth been distributed; and do changes in the structure of the economy map into changes in inequality? We explore dimensions in which inequality may vary, notably urban versus rural, and by ethnic status. We also decompose inequality by income source to highlight key factors underlying the relatively low levels of inequality during this period. We find that agricultural opportunities played an important role in dampening inequality, but more important has been the steady development of wage-labor markets in both urban and rural areas. An important caveat to the generally rosy picture we paint is the deteriorating position of ethnic minorities. Finally, we draw comparisons with China and document key differences in their growth-inequality experiences.     

THE DIFFERENTIAL EFFECT OF LABOR MARKET CONTEXT ON MARGINAL EMPLOYMENT OUTCOMES

Transformation of the labor market creates a complex and dynamic environment where jobs and skills are exchanged. Studies suggest that contemporary industrial shifts provided less opportunity than in the past, and that technological change led to a complicated melange of employment outcomes. Many of the new jobs are characterized by a series of negative qualities related to income and hours. Accordingly, this analysis concentrates on inadequate employment through low-wage work and involuntary part-time work. I examine the effect of contextual factors, specifically area levels of occupational sex-segregation and the size of the service sector industry, on men and women's marginal employment outcomes. Several findings stand out. First, women post higher chances of working for low-wages than their male counterparts. However, employment in the expanding service sector does reduce men and women's chances of experiencing part-time work. Second, the protection afforded by individual level, human capital qualities remains relatively constant for women across metro areas, but labor market context significantly affects women's odds of employment marginalization. Context is not as salient for men, but the value of their personal attributes vary across labor markets. Finally, women working in areas with higher levels of occupational sex-segregation were relatively worse off than those in areas with more integration. Industrial restructuring clearly contributed to recent shifts in U.S. employment and inequality. Studies suggest that contemporary industrial shifts have provided less opportunity than in the past, greater inequality between rich and poor, and a complicated melange of inadequate employment outcomes (Colclough and Tolbert 1992; Farley 1996; Harrison and Bluestone 1988; Morris, Bernhardt, and Handcock 1994; Sassen 1994). Deindustrialization, as it is sometimes called, offers opportunity for highly-educated, skilled, or technologically-innovative men and women. However, lower skilled workers or those with less education may face relatively good job markets filled with positions that are low quality in terms of wages, hours, or benefits. This bifurcation of work is credited with not only reducing the sex-wage gap, but also increasing inequality within sex groups (Bernhardt, Morris, and Handcock 1995). By employing a new structuralist approach and focusing on the area opportunity structure, along with the traditional human capital framework, I link both the local labor market context and individual qualities that affect employment outcomes (Browne 1997; Cotter et al. 1997; McCall 2000). In this article, I examine the effect of contextual factors, specifically the area industrial composition and the openness of the labor market, on men and women's marginal employment outcomes during the early 1990s.     

Is America coming apart? Socioeconomic segregation in neighborhoods,schools, workplaces,and social networks, 1970–2020

As income inequality in the United States has reached an all-time high, commentators from across the political spectrum warn about the social implications of these economic changes. America, they fear, is “coming apart” as the gap between the rich and poor grows into a fault line. This paper provides a comprehensive review of empirical scholarship in sociology, education, demography, and economics in order to address the question: How have five decades of growing economic inequality shaped America's social landscape? We find that growing levels of income inequality have been accompanied by increasing socioeconomic segregation across (1) friendship networks and romantic partners, (2) residential neighborhoods, (3) K-12 and university education, and (4) workplaces and the labor market. The trends documented in this review give substance to commentators' concerns: compared to the 1970s, rich and poor Americans today are less likely to know one another and to share the same social spaces. The United States is a nation divided.     

THE EXCHANGE VALUE OF NONPECUNIARY BENEFITS

Several important contributions to the property rights literature develop the point that different institutional arrangements lead to differences in the relative cost of income in pecuniary form versus income in nonpecuniary form. This analytical framework is rich in positive content, although few attempts have been made to measure directly the exchange value of nonpecuniary income. This paper posits a simple method for approximating the exchange value of nonpecuniary rewards and offers some estimates of this value for a particular occupational category: namely, scientists in the United States. The results of this estimation indicate that nonpecuniary benefits are an important component of total remuneration in government employment relative to private sector employment for this occupational group.     

Environmentalization: Origins,Processes, and Implications for Rural Social Change1

Abstract This paper seeks to go beyond the sui eneris conception of the increased role of “green” forces and the concomitant environmentalization of institutional practices in the United States and elsewhere across the world. It is argued that these forces must be located in the transition from social-democratic to neo-conservative regimes of social regulation of economy and society that has occurred during the past 15 or so years of global economic stagnation. This transition and its reflection in greening and environmentalization may be seen to have contradictory implications for rural societies. These implications are explored briefly with respect to sustainable development programs in the developing countries, sustainable agricultural research and outreach in the United States, and the possible growth of environmental symbolization of rural spaces.     

Changing Income Inequality in Nonmetropolitan Counties, 1980 to 1990*

Abstract Income inequality has been increasing across the United States, but little is known about changing income inequality in nonmetropolitan counties. Data from the 1980 and 1990 Summary Tape Files of the U.S. Census of Population and Housing are used to estimate ordinary least squares models of change in income inequality. Household income inequality increased in a smaller share of nonmetro than metro counties from 1980 to 1990, and increases in income inequality were influenced more strongly by economic restructuring in nonmetro than in metro counties. Other factors, such as change in household structure, demographic composition, and labor supply and job quality, were generally similar in affecting income inequality in nonmetro and metro counties. The greater importance of economic restructuring in nonmetro counties indicates the lesser diversity and smaller size of local economies, and their greater vulnerability to forces of economic restructuring.     

Status and income inequality in a knowledge economy

This paper models a market for status contained in a knowledge economy. Technological progress favours the knowledge sector and inequality of income rises with productivity. We show that the expected utility of all agents can fall while output and productivity grow; and such an outcome of “immiserizing growth” hinges crucially upon the combination of concern for status and technology-induced rises in inequality.     

Poverty,Place, and Coal Employment across Appalachia and the United States in a New Economic Era

The impacts of employment in the coal industry remain controversial. Few studies have investigated these impacts over the decade of the great recession and in light of the nation's changing energy economy. We bring together two long‐standing rural sociological traditions to address debates framed at the national level and for Appalachian communities facing the throes of transition from the coal industry. Building from rural sociology's “poverty and place” tradition and from natural resources sociology, we examine the relationship between coal employment and communities’ economic well‐being as indicated by poverty, household income, and unemployment. The study spans U.S. and Appalachian counties from 1990 to 2010. U.S. counties with greater coal employment in 1990 had lower income and higher poverty in 2000. Overall, however, coal employment's effect is mixed in the 1990–2000 decade. By contrast, for the recent 2000–2010 decade, coal employment is positively associated with indicators of well‐being. In Appalachia, fewer employment alternatives outside mining are related to higher well‐being. Our findings extend the poverty and place literature and the natural resources literature and underscore why a just transition away from coal should focus on moving communities toward sectors offering better future livelihoods.     

PITFALLS IN TESTING FOR COINTEGRATION BETWEEN INEQUALITY AND THE REAL INCOME

Frank (2009) constructed a comprehensive panel of state‐level income inequality measures using individual tax filing data from the Internal Revenue Service. Employing an array of cointegration exercises for the data, he reported a positive long‐run relationship between income inequality and the real income per capita in the United States. This article questions the validity of his findings. First, we suggest a misspecification problem in his approach regarding the order of integration in the inequality index, which shows evidence of nonstationarity only for the post‐1980 data. Second, we demonstrate that his findings are not reliable because the panel cointegration test he used requires cross‐section independence, which is inappropriate for the U.S. state‐level data. Employing panel tests that allow cross‐section dependence, we find no evidence of cointegration between inequality and the real income. (JEL D31, O40)