Convergence in Income Inequality: Further Evidence from the Club Clustering Methodology Across the U.S. States

International Advances in Economic Research, May 2018

36 Pages Posted: 28 Jun 2015 Last revised: 27 Jul 2020

See all articles by Nicholas Apergis

Nicholas Apergis

Northumbria University - Economics Department

Christina Christou

University of Piraeus

Rangan Gupta

University of Pretoria - Department of Economics

Stephen M. Miller

University of Nevada, Las Vegas - Department of Economics; University of Connecticut - Department of Economics

Date Written: June 26, 2015

Abstract

This paper contributes to the sparse literature on inequality convergence by empirically testing convergence across the U.S. States. This sample period encompasses a series of different periods that are discussed in the existing literature -- the Great Depression (1929-1944), the Great Compression (1945-1979), the Great Divergence (1980-present), the Great Moderation (1982-2007), and the Great Recession (2007-2009). This paper implements the relatively new methodology of panel convergence testing, recommended by Phillips and Sul (2007). This method examines the club convergence hypothesis, which argues that certain countries, states, sectors, or regions belong to a club that moves from disequilibrium positions to their club-specific steady-state positions. We find strong support for convergence through the late 1970s and early 1980s and then evidence of divergence. The divergence, however, moves the dispersion of inequality measures across states only a fraction of the way back to their levels in the early part of the 19th Century.

Keywords: Club convergence, Inequality measures, Panel data, US states

JEL Classification: C22, D63

Suggested Citation

Apergis, Nicholas and Christou, Christina and Gupta, Rangan and Miller, Stephen M., Convergence in Income Inequality: Further Evidence from the Club Clustering Methodology Across the U.S. States (June 26, 2015). International Advances in Economic Research, May 2018, Available at SSRN: https://ssrn.com/abstract=2623724 or http://dx.doi.org/10.2139/ssrn.2623724

Nicholas Apergis

Northumbria University - Economics Department ( email )

Newcastle-Upon-Tyne, NE1 8ST
United Kingdom

Christina Christou

University of Piraeus ( email )

Karaoli and Dimitriou 80
80 KARAOLI & DIMITRIOU STREET
Piraeus, Attiki 18534
Greece

Rangan Gupta

University of Pretoria - Department of Economics ( email )

Lynnwood Road
Hillcrest
Pretoria, 0002
South Africa

Stephen M. Miller (Contact Author)

University of Nevada, Las Vegas - Department of Economics ( email )

4505 S. Maryland Parkway
Box 456005
Las Vegas, NV 89154
United States
702-895-3776 (Phone)
702-895-1354 (Fax)

HOME PAGE: http://faculty.unlv.edu/smiller/

University of Connecticut - Department of Economics

365 Fairfield Way, U-1063
Storrs, CT 06269-1063
United States

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