Regional Income Inequality Research Articles

The income–inequality nexus in a developed country: small-scale regional evidence from Austria

ABSTRACTThe income–inequality nexus in a developed country: small-scale regional evidence from Austria. Regional Studies. This paper analyses the relationship between regional inequality and average income in a small-scale framework for Austria. The empirical findings are based on a novel inequality database generated from individual wage tax information at the municipality level. This study researches the magnitude of regional spillovers of income and inequality using spatial econometric methods. The results show a pronounced positive relation between regional income levels and inequality, where especially high-income municipalities exhibit a large spread in the income distribution. Furthermore, it shows that higher levels of inequality are associated with income gains at the top of the distribution.

The equalising power of internal immigration and the desertification process of southern Italy

According to some scholars, immigration can have a relevant role in the reduction of inequality. It has happened in the past and it may also happen in the future, as it is possible and desirable. However, migration in itself does not resolve definitely the issue of the inequalities and, moreover, in light of the recent studies on the effect of immigration, the exigency of additional in depth research on the impact of this phenomenon on regional disparities and income inequalities has become evident. The present paper faces these relevant issues, focusing on the regional impact of internal migration and attempting to demonstrate, with reference to the Italian case, how out-migration can increase income inequalities, thus hindering economic growth and exacerbating regional disparities, while immigration can reduce income inequalities and mitigate economic imbalances, according to the hypothesis of skilled immigration equalising, formulated in 2008 by Kahanec and Zimmermann.

Decomposing US regional income inequality from 1969 to 2009

ABSTRACTThis article analyses changes in levels and composition of income inequality among US counties from 1969 to 2009. It also decomposes inequality using the Theil coefficient into between-State and within-State inequality. The article finds that income inequality has increased in the period studied with between-State inequality decreasing and within-State inequality increasing. We subsequently decompose income inequality into the proportion arising from differences in productivity and employment–population ratios across counties. The results suggest that inequality arising from differentials in labour productivity has fallen over the period studied while those arising from employment–population ratio differences have increased.

Income Distribution Patterns in the State of Ohio A Preliminary Observation

The problem of income and wealth inequality, together with persistently high poverty rates, in the U.S. is getting a great deal of attention recently. As part of a series of researches on regional income inequality and poverty issues, this paper aims to present a preliminary result of the author’s statistical analysis of income distribution patterns in the State of Ohio. Applying some of well-known statistical tools such as the Gini coefficient and the linear interpolation method to publicly available state level personal income tax data from 1986 to 2013, the paper attempts to show a snapshot of historical income distribution patterns in Ohio. The preliminary result in this paper shows that income distribution in Ohio has broadly followed national trends of worsening income inequality, especially since the 1980s. However, unlike many Eastern cities or states (such as New York City and New York State) where FIRE (finance, insurance, real estate) sector has been predominant in their industrial structure, Ohio state seems to have its own structural causes of unequitable income distribution. These structural causes may include drastic corporate offshoring, introduction of labor saving technologies in the remaining goods-producing industries, and the continual dis-industrialization process reinforced by a particular set of trade policies. With these hypotheses in mind, the author will seek to identify relative significance of structural factors lain behind this particular regional income inequality pattern in Ohio in following up papers. In addition, later research will also include an analysis of differential gross earnings by industries, county-level income distribution patterns and poverty rates, which may show potentially vast regional divides and variations within the state of Ohio.

WHY DID SPANISH REGIONS NOT CONVERGE BEFORE THE CIVIL WAR? AGGLOMERATION ECONOMIES AND (REGIONAL) GROWTH REVISITED

ABSTRACTIn this paper we explore the relationship between the presence of agglomeration economies and regional economic growth in Spain during the period 1870-1930. The study allows us to revisit the existence of a trade-off between economic growth and territorial cohesion, and also to examine whether the existence of agglomeration economies could explain the upswing in regional income inequality during the early stages of development. In doing so, we present alternative indicators for agglomeration economies and estimate conditional growth regressions at province (NUTS3) level. In line with new economic geography models, agglomeration economies in a context of market integration widened regional inequality in the second half of the 19th century and hindered its reduction during the early decades of the 20th.

Development Policy Implications for Growth and Regional Inequality in a Small Open Economy: The Indian Case

AbstractInclusive economic development has become a pressing goal of government policy in India in the face of rising regional inequality. This paper examines the role of targeted development policy action in inducing economic growth and also in reducing regional income inequality during the last two decades (since the beginning of the 1990s)—a period marked by increasing trade openness. In our disaggregated analysis of the states, we find that while the government capital expenditure policy has had significant positive impact on output growth of the poorer states, it failed to break the trend of escalating regional inequality. The policy has been significantly more effective in enhancing manufacturing sector output in the poorer states compared with the richer states. On the trade front, while the poorer states gained somewhat in income growth from greater openness, the gains were not large enough to offset the increasing regional disparity.

Poverty, Income Inequality, and Irrigation Development: Longitudinal Evidence from Palawan, Philippines

We measure the impacts of irrigation development on poverty and income inequality in a frontier region of the Philippines. Using household panel data we measure changes in standard poverty measures and income inequality over the period 1995–2002. We make comparisons within the beneficiary community and between the beneficiary community and an adjacent community that, while not affected directly by irrigation services, was indirectly affected through expanded labor market opportunities arising from irrigation. Results of the analyses, including poverty and inequality decompositions, suggest lowland irrigation development led to reduced income inequality and lower rates of poverty in the lowland community, reduced inequality and lower rates of poverty for the group of upland households who participated in off-farm work on irrigated lowland farms, and higher overall income inequality between the lowland and upland communities.

Income inequality in European Regions: Recent trends and determinants

Income inequality is both at the political and academic agenda. Because of the Great Recession, income inequality has experienced an increase in many parts of the world in general and in many European regions in particular. In addition, several academics have signalled inequality as a source of such crisis. Nevertheless, few attempts have been made for conducting the analysis at the regional level. In this work we analyse the main factors behind current trends in inequality in Europe over the last decade. We develop our analysis at the regional level, which adds a new dimension to the existing literature. Our results point to a large diversity in inequality patterns. Inequality is on average lower in more developed regions, but recent increases in inequality seem associated with economic growth. Our results suggest that tertiary specialisation, openness, and technological change, although likely to be associated with economic growth, are also associated with increasing inequalities.

Bayesian structured additive distributional regression with an application to regional income inequality in Germany

We propose a generic Bayesian framework for inference in distributional regression models in which each parameter of a potentially complex response distribution and not only the mean is related to a structured additive predictor. The latter is composed additively of a variety of different functional effect types such as nonlinear effects, spatial effects, random coefficients, interaction surfaces or other (possibly nonstandard) basis function representations. To enforce specific properties of the functional effects such as smoothness, informative multivariate Gaussian priors are assigned to the basis function coefficients. Inference can then be based on computationally efficient Markov chain Monte Carlo simulation techniques where a generic procedure makes use of distribution-specific iteratively weighted least squares approximations to the full conditionals. The framework of distributional regression encompasses many special cases relevant for treating nonstandard response structures such as highly skewed nonnegative responses, overdispersed and zero-inflated counts or shares including the possibility for zero- and one-inflation. We discuss distributional regression along a study on determinants of labour incomes for full-time working males in Germany with a particular focus on regional differences after the German reunification. Controlling for age, education, work experience and local disparities, we estimate full conditional income distributions allowing us to study various distributional quantities such as moments, quantiles or inequality measures in a consistent manner in one joint model. Detailed guidance on practical aspects of model choice including the selection of several competing distributions for labour incomes and the consideration of different covariate effects on the income distribution complete the distributional regression analysis. We find that next to a lower expected income, full-time working men in East Germany also face a more unequal income distribution than men in the West, ceteris paribus.

Intimate partner violence among women in Spain: the impact of regional-level male unemployment and income inequality.

Intimate partner violence (IPV) against women is a complex worldwide public health problem. There is scarce research on the independent effect on IPV exerted by structural factors such as labour and economic policies, economic inequalities and gender inequality. To analyse the association, in Spain, between contextual variables of regional unemployment and income inequality and individual women's likelihood of IPV, independently of the women's characteristics. We conducted multilevel logistic regression to analyse cross-sectional data from the 2011 Spanish Macrosurvey of Gender-based Violence which included 7898 adult women. The first level of analyses was the individual women' characteristics and the second level was the region of residence. Of the survey participants, 12.2% reported lifetime IPV. The region of residence accounted for 3.5% of the total variability in IPV prevalence. We determined a direct association between regional male long-term unemployment and IPV likelihood (P = 0.007) and between the Gini Index for the regional income inequality and IPV likelihood (P < 0.001). Women residing in a region with higher gender-based income discrimination are at a lower likelihood of IPV than those residing in a region with low gender-based income discrimination (odds ratio = 0.64, 95% confidence intervals: 0.55-0.75). Growing regional unemployment rates and income inequalities increase women's likelihood of IPV. In times of economic downturn, like the current one in Spain, this association may translate into an increase in women's vulnerability to IPV.

Creative Cities and the New Global Hierarchy

The world experienced three major urbanization processes between the eleventh and the twentieth century. All three periods of city growth were associated with revolutionary improvements in the logistical systems. In large parts of the world the third logistical revolution (the Industrial Revolution) has not yet come to an end. In industrializing countries and regions urbanization is thus very rapid. Concurrently, a new and fourth logistical revolution is changing the economic, social and regional structure of the post-industrial parts of the world, leading to the creation of a new Creative Society. A key aspect of this development is the increasing role of creative and innovative city regions with global linkages. These regions now form a new supranational rank-size distribution, which is centred on a few conurbations in Europe, North America and East Asia. Most post-industrial economic development is taking place in a small number of highly ranked creative regions, while other regions are suffering from the “creative destruction” of their traditional industries. One consequence of this restructuring is increasing regional income inequalities in the post-industrial nations.

Does Income Inequality Make Us Less Happy?

AbstractThis article presents evidence from Australia showing linkages between income inequality in an individual's geographical region and life satisfaction. Higher income inequality is associated with lower self‐rated life satisfaction. In contrast to expectations that inequality may primarily be an issue of concern for poorer individuals, the relationship holds strongly for higher income households, but the evidence for lower income households is less conclusive. Shadow price estimates indicate that, in order to offset the effect of annual changes in inequality over the sample period (2001–2009), an average Australian would require compensatory changes of approximately 3–9 per cent in income each year (about $3,689 in 2009).

Comparative spatial inequality dynamics: The case of Mexico and the United States

In this paper we examine the trajectory of regional income inequality dynamics for two neighboring national systems. Using data on 3038 US counties and 2418 Mexico municipios, from 2000, 2005, and 2010, we employ recent extensions of spatial Markov chains and space-time mobility measures, to consider the following questions: Are regional inequality dynamics fundamentally distinct between Mexico and the United States? Does the role of spatial context influence the distributional dynamics of the two systems? Finally we examine if there is a distinct international border region that displays inequality dynamics different from those of the internal regions of the two national systems. Strong evidence of spatial heterogeneity in regional income mobility is found between the two national systems, with Mexico having higher mobility relative to the US. The international border region is found to have distinct mobility dynamics from either national system, experiencing the strongest mobility. Extensive evidence of spatial contextual effects are found throughout the US-Mexican pooled data set indicating that a region's transitional dynamics are influenced by incomes of neighboring regions.

Spatial and Social Mobility

This paper analyzes the relationship between spatial mobility and social mobility. It develops a two-skill-type spatial equilibrium model of two regions with location preferences where each region consists of an urban area which is home to workplaces and residences and an exclusively residential suburban area. The paper demonstrates that both segregation and regional income inequality are negatively correlated with relative regional social mobility. In the model, segregation is driven by differences between urban and residential areas in commuting cost differences between high-skilled and low-skilled workers, whereas regional income inequality also depends on the magnitude of the productivity gap of low-skilled relative to high-skilled workers. A larger productivity gap does not affect segregation, but causes higher income inequality and lower relative mobility in the respective region.

Regional Income Distribution in Mexico: New Long-Term Evidence, 1895-2010

In the last years, Economic History literature has paid close attention to the long-term changes undertaken by regional income inequality in different countries after the integration of their domestic markets. Nevertheless, this literature has mainly focused on developed economies (US and Europe). New evidence is required from peripheral economies, where economic growth has had different features, and income inequality may have been dominated by other forces and followed different trends. The aim of this paper is to analyse several dimensions of the long-term evolution of Mexican regional income inequality, from the early stages of domestic markets integration to the present (1895–2010). This analysis may be taken as basis for further explanatory analysis and may contribute to the emergence of new hypothesis to explain the long-term changes in regional inequality in peripheral economies.

金融发展对居民收入不平等影响的实证分析—来自云南16个地州市的经验证据

云南省金融发展对居民收入不平等的改善具有一定的作用。论文采用2008~2012年云南省16个地州市的面板数据进行实证分析，结果发现：云南省金融发展与收入不平等是非线性关系，二者呈“倒U型”。因此，缩减云南省居民间的收入不平等必须注重金融发展的规模与效率、深化金融发展的同时需考量区域间金融发展和收入不平等存有的异质性，才能制定良好的经济金融政策，以缩减居民收入不平等程度。 Financial development has a certainly effect on the reduction of income inequality. Using the panel data of 16 cities from 2008 to 2012 in Yunnan Province, this paper examines the relationship between financial development and residents’ income inequality by empirical analysis in Yunnan Province. The results of regression suggest that there is a nonlinear relationship of “inverted U shape” between financial development and income inequality. Therefore, reducing the income inequality needs to pay attention to the scale and efficiency of financial development, deepen financial development, and consider the entities of heterogeneity in regional financial development and income inequality for making perfectly economic and finance policies to reduce the income inequality of residents in Yunnan.

Regional Inequality, Convergence, and its Determinants - A View from Outer Space

This paper provides a new data set of regional income inequalities within countries based on satellite nighttime light data. We first empirically study the relationship between luminosity data and regional incomes for those countries where regional income data are available. We subsequently use our estimation results for an out-ofsample prediction of regional incomes based on the luminosity data, which allows us to investigate regional income differentials in developing countries as well, where official income data are lacking. Based on the predicted incomes, we calculate commonly used measures of regional inequality within countries. Investigating changes in the dispersion of regional incomes over time reveals that approximately 71-80% of all countries face sigma-convergence. Finally, we study different major determinants of the level of regional inequality based on cross-section data. Panel regressions investigate the within-country changes in inequality, i.e., the determinants of the convergence process. We find evidence for an N-shaped relationship between development and regional inequality. Geography, mobility and trade openness are also highly important.

Analysis on Technical Innovation and Regional Sustainable Development of China

In this paper, we estimated the spatial effect of technical innovation and FDI on regional income inequality based on the panel data of 30 provinces in China from 1990 to 2010. By using Matebal and Arcgic software, we carry out a brief description and analysis about the innovation agglomeration and local knowledge spillovers in China and map marking these two effects.

Inequality, Economic Growth and Poverty in the Middle East and North Africa (MENA)

In this paper, we have presented the patterns of inequality, growth and income inequality in the MENA region. Using a cross-sectional time series data of MENA countries for the period 1985–2009, we have also investigated the effect of income inequality on key societal development, namely economic growth and poverty, in the region. Our empirical results show that income inequality reduces economic growth and increases poverty in the region. Other factors having significant negative effect on economic growth in the MENA region include previous growth rate, exchange rate, government consumption expenditure or government burden, initial per capita GDP, inflation and primary education. On the other hand, variables positively and significantly associated with MENA's economic growth are domestic investment rate, urbanization, infrastructure development, and mineral rent as a percentage of GDP. In addition, apart from income inequality, other factors increasing poverty in the region are foreign direct investment, population growth, inflation rate, and the attainment of only primary education. Poverty-reducing variables in the region include domestic investment, trade openness, exchange rate, income per capita, and oil rents as a percentage of GDP.

Decomposing the Gini Inequality Index

The aim of this article is to propose a new breakdown of the Gini inequality ratio into three components ( within-group inequality, between-group inequality, and intensity of transvariation between groups to the total inequality index). The between-group inequality concept computes all the differences in salaries between men and women. The main contribution is to show this relationship when dealing with noninteger frequency data appearing on survey data. This article also proves the relationship between the very intuitive Gini concentration ratio and the very commonly used Gini index in the case of discrete distributions with a finite number of observations. The former refers to the relationship between the cumulative proportion of population and income, while the latter is the absolute mean difference divided by twice the arithmetic mean. This article complements the inequality decomposition literature that has stemmed from Gini’s work. The research is applied to analyze gender income inequality in a Spanish region using Spanish Structure of Earnings Survey data from 2010.