Document Type

Article

Publication Date

3-20-2018

Publication Title

International Advances in Economic Research

First page number:

1

Last page number:

15

Abstract

This paper contributes to the sparse literature on inequality convergence by empirically testing convergence across states in the U.S. This sample period encompasses a series of different periods that the existing literature discusses -- 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 method 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 twentieth century.

Keywords

Club convergence; Inequality measures; Panel data; U.S.

Disciplines

Economic Theory | Income Distribution

File Format

application/pdf

File Size

802 kb

Language

English

Permissions

This is a post-peer-review, pre-copyedit version of an article published in International Advances in Economic Research. The final authenticated version is available online at: http://dx.doi.org/10.1007/s11294-018-9675-y.

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