Abstract

https://ssrn.com/abstract=2649215
 


 



Unequal Incomes, Ideology and Gridlock: How Rising Inequality Increases Political Polarization


John Voorheis


University of Oregon - Department of Economics

Nolan McCarty


Princeton University - Woodrow Wilson School of Public and International Affairs; Princeton University - Department of Political Science

Boris Shor


University of Houston - Department of Political Science; Georgetown University, Department of Government

August 21, 2015


Abstract:     
Income inequality and political polarization have both increased dramatically in the United States over the last several decades. A small but growing literature has suggested that these two phenomena may be related and mutually reinforcing: income inequality leads to political polarization, and the gridlock induced by polarization reduces the ability of politicians to alleviate rising inequality. Scholars, however, have not credibly identified the causal relationships. Using newly available data on polarization in state legislatures and state-level income inequality, we extend previous analyses to the US state level. Employing a relatively underutilized instrumental variables identification strategy allows us to obtain the first credible causal estimates of the effect of inequality on polarization within states. We find that income inequality has a large, positive and statistically significant effect on political polarization. Economic inequality appears to cause state Democratic parties to become more liberal. Inequality, however, moves state legislatures to the right overall. Such findings suggest that the effect of income inequality impacts polarization by replacing moderate Democratic legislators with Republicans.

Number of Pages in PDF File: 52

Keywords: polarization, income inequality, state legislatures, ideology

JEL Classification: D63, D31, D72


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Date posted: August 23, 2015  

Suggested Citation

Voorheis, John and McCarty, Nolan and Shor, Boris, Unequal Incomes, Ideology and Gridlock: How Rising Inequality Increases Political Polarization (August 21, 2015). Available at SSRN: https://ssrn.com/abstract=2649215 or http://dx.doi.org/10.2139/ssrn.2649215

Contact Information

John Voorheis (Contact Author)
University of Oregon - Department of Economics ( email )
Eugene, OR 97403
United States
HOME PAGE: http://pages.uoregon.edu/jlv
Nolan McCarty
Princeton University - Woodrow Wilson School of Public and International Affairs ( email )
Princeton University
Princeton, NJ 08544-1021
United States
Princeton University - Department of Political Science ( email )
Corwin Hall
Princeton, NJ 08544-1013
United States
(609) 258-1862 (Phone)
(609) 258-2809 (Fax)
Boris Shor
University of Houston - Department of Political Science ( email )
Houston, TX 77204-3011
United States
Georgetown University, Department of Government ( email )
Washington, DC 20057
United States
3122834599 (Phone)
HOME PAGE: http://research.bshor.com
Feedback to SSRN


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