The Effect of Political Parties on the Distribution of Income in the American States: 1917–2011

Abstract

ObjectivesThis article examines the effects of partisan control of government on income distribution within the United States.MethodsUsing newly available data, we estimate the effects of unified Democratic and Republican Party control at the state and national levels on the share of income going to the top 1 percent of income earners, by state, between 1917 and 2011.ResultsWe find that unified party control at the state level has minimal impact on income going to the top 1 percent of income earners within the states, but that unified party control at the federal level does have an effect. Moreover, we find that over the long term, unified Democratic control at the federal level leads to less income going to the top 1 percent, while unified Republican control increases income going to top earners.ConclusionsDespite the increased focus on federalism and state policy in studies of income inequality, our findings suggest that federal‐level political factors are important for understanding the share of income going to the top income earners in the United States, particularly in the contemporary era.