Inequality and Growth in the United States: Evidence from a New State-Level Panel of Income Inequality Measures
Posted: 15 Sep 2008
Date Written: September, 11 2008
This paper introduces a new comprehensive panel of annual state-level income inequality measures spanning the postwar period 1945-2004. For many states, the share of income held by the top decile experienced a prolonged period of stability after World War II, followed by a substantial increase in inequality during the 1980s and 1990s. This paper also presents an examination of the long-run relationship between income inequality and economic growth. Our findings indicate that the long-run relationship between inequality and growth is positive in nature and driven principally by the concentration of income in the upper end of the income distribution.
Keywords: Income Inequality, Economic Growth
JEL Classification: D31, O40
Suggested Citation: Suggested Citation