Title
Causality Between Output and Income Inequality Across US States: Evidence from a Heterogeneous Mixed Panel Approach
Document Type
Article
Publication Date
6-26-2020
Publication Title
Journal of Income Distribution
Volume
28
Issue
1
First page number:
20
Last page number:
25
Abstract
In this paper, we investigate the causal relationship between output, proxied by personal income, and income inequality in a panel data of 48 states from 1929 to 2012. We employ the causality methodology proposed by Emirmahmutoglu and Kose (2011), as it incorporates possible slope heterogeneity and cross-sectional dependence in a multivariate panel. Evidence of bi-directional causal relationship exists for several inequality measures -- the Atkinson Index, Gini Coefficient, the Relative Mean Deviation, Theil’s entropy Index and Top 10% -- but no evidence of the causal relationship for the Top 1 % measure. Also, this paper finds state-specific causal relationships between personal income and inequality.
Disciplines
Business | Labor Relations
Language
English
Repository Citation
Miller, S.
(2020).
Causality Between Output and Income Inequality Across US States: Evidence from a Heterogeneous Mixed Panel Approach.
Journal of Income Distribution, 28(1),
20-25.