Changes in income inequality across the U.S.

Regev, Tali; Wilson, Daniel J.

Journal Article

Changes in income inequality across the U.S.

Abstract: Over the past four decades, overall income inequality has increased in the U.S. One particularly striking feature of the data is that the income gap has widened most between the top and the middle of the distribution, while it has remained relatively stable between the middle and the bottom. The causal forces behind the increase in inequality have been a topic of much debate among the public, the media, and policymakers, as well as a rich field of research for economists. ; We examine income trends at the county level between 1990 and 2000. Basing our analysis on leading theories of the growing gap between the top and middle of the distribution as well as the stable gap between the middle and the bottom, we explore whether county differences in skill levels, immigration levels, and vulnerability to offshoring?that is, relocating domestic operations overseas?appear to be associated with these trends. Our results do lend tentative support to these theories.

Keywords: Income distribution;