Local Income Inequality Research Articles

Income Inequality and County Economic Resistance to Job Loss during the Great Recession

This paper examines the effects of income inequality on short-run changes in growth in the context of the most recent U.S. recession in both urban and rural counties. Resistance to job loss in the Great Recession is modeled as a function of local income inequality, controlling for community capital assets, and the size and structure of the local population and economy. Regression results suggest that the effect of local inequality on resilience depends on the size of a county’s population. High inequality increases the recessionary employment drop in counties with large populations but reduces the employment drop in the smallest counties.

Perceived social status and mental health among young adolescents: Evidence from census data to cellphones.

Adolescents in the United States live amid high levels of concentrated poverty and increasing income inequality. Poverty is robustly linked to adolescents' mental health problems; however, less is known about how perceptions of their social status and exposure to local area income inequality relate to mental health. Participants consisted of a population-representative sample of over 2,100 adolescents (ages 10-16), 395 of whom completed a 14-day ecological momentary assessment (EMA) study. Participants' subjective social status (SSS) was assessed at the start of the EMA, and mental health symptoms were measured both at baseline for the entire sample and daily in the EMA sample. Adolescents' SSS tracked family, school, and neighborhood economic indicators (|r| ranging from .12 to .30), and associations did not differ by age, race, or gender. SSS was independently associated with mental health, with stronger associations among older (ages 14-16) versus younger (ages 10-13) adolescents. Adolescents with lower SSS reported higher psychological distress and inattention problems, as well as more conduct problems, in daily life. Those living in areas with higher income inequality reported significantly lower subjective social status, but this association was explained by family and neighborhood income. Findings illustrate that adolescents' SSS is correlated with both internalizing and externalizing mental health problems, and that by age 14 it becomes a unique predictor of mental health problems. (PsycINFO Database Record (c) 2019 APA, all rights reserved).

Water and sewer affordability in the United States

The ability of low‐income families to pay for basic water and sewer services is a subject of increasing concern. Large‐scale assessments of affordability across large numbers of American utilities are rare, however, and are limited by poor measurement and biased samples. The present study uses improved metrics and data from an original, representative sample of water and sewer utilities in the United States to calculate the affordability of basic single‐family residential water and sewer service for low‐income households. Results indicate that low‐income households must spend an average of 9.7% of their disposable income and/or work 9.5 h at minimum wage to pay for basic monthly water and sewer service but also that these values vary considerably across the country. Community‐level demographic and economic data are used to identify some correlates of affordability. Region, utility size, and local income inequality emerge as strong correlates of affordability.

The drivers of local income inequality: a spatial Bayesian model-averaging approach

ABSTRACTThis study analyzes the drivers of local income inequality in Spain. It derives a novel data set of inequality metrics for a sample of municipalities over the period 2000–06. Spatial Bayesian model selection and model-averaging techniques are used in order to examine the empirical relevance of (1) spatial functional forms, (2) spatial weight matrices and (3) a large set of factors that could affect inequality. The findings suggest that local inequality is mainly explained by human capital, economic factors and local politics. In addition, the use of Bayesian geographically weighted regressions provides evidence in favour of spatially heterogeneous effects.

Income Inequality Affects the Psychological Health of Only the People Facing Scarcity

Following the status-anxiety hypothesis, the psychological consequences of income inequality should be particularly severe for economically vulnerable individuals. Oddly, however, income inequality is often found to affect vulnerable low-income and advantaged high-income groups equally. We argue that economic vulnerability is better captured by a financial-scarcity measure and hypothesize that income inequality primarily impairs the psychological health of people facing scarcity. First, repeated cross-sectional international data (from the World Values Survey: 146,034 participants; 105 country waves) revealed that the within-country effect of national income inequality on feelings of unhappiness was limited to individuals facing scarcity (≈25% of the World Values Survey population). Second, longitudinal national data (Swiss Household Panel: 14,790 participants; 15,595 municipality years) revealed that the within-life-course effect of local income inequality on psychological health problems was also limited to these individuals (< 10% of the Swiss population). Income inequality by itself may not be a problem for psychological health but, rather, may be a catalyst for the consequences of financial scarcity.

Income inequality, perceived competitiveness, and approach-avoidance motivation.

Scholars disagree on whether income inequality has incentive or disincentive effects. In the present research, we move beyond such debate and focus on the motivational processes that income inequality predicts. First, income inequality makes economic stratification salient; therefore, it should promote perceived competitiveness. Second, competitiveness can be appraised as both a challenge and a threat; therefore, it should promote both approach and avoidance motivation. In three studies (N=2,543), U.S. residents from various ZIP codes reported the extent to which they perceived competitiveness in their town/city (Studies 1-3), as well as their economic achievement goals, achievement motives, and self-regulatory foci (Studies 2-3). Level of local income inequality was found to be a positive predictor-via increased perceived competitiveness-of other-approach economic goals, need for achievement, and promotion focus, as well as other-avoidance economic goals, fear of failure (specifically, the shame/embarrassment component), and prevention focus. Furthermore, actual and perceived income inequality were positively correlated. The conceptual and empirical work herein is the first to show how the economic environment predicts individuals' perceptions of competitiveness, influencing personal goals, motives, and orientations. It provides a more nuanced perspective on the implications of income inequality than perspectives currently available.

Do payments for forest ecosystem services generate double dividends? An integrated impact assessment of Vietnam's PES program.

Payments for ecosystem services (PES) often serve multiple objectives, such as carbon emission reduction and poverty alleviation. However, the effectiveness of PES as an instrument to achieve these multiple objectives, in particular in a conservation-development context, is often questioned. This study adds to the very limited empirical evidence base and investigates to what extent Vietnam’s move to PES has helped protect forest ecosystems and improve local livelihoods and income inequality. We zoom in on Lam Dong province, where PES was first introduced in Vietnam in 2009. Changes in forest cover are analysed using satellite images over a period of 15 years (2000–2014). Socio-economic impacts are assessed based on rural household interviews with PES participants and non-participants as a control group over a period of 7 years (2008–2014). Our results show that PES contributes significantly to forest cover, the improvement of local livelihoods, and the reduction of income inequality.

Local Income Inequality, Individual Socioeconomic Status, and Unmet Healthcare Needs in Ohio, USA.

Purpose: Income inequality has been implicated as a potential risk to population health due to lower provision of healthcare services in deeply unequal countries or communities. We tested whether county economic inequality was associated with individual self-report of unmet healthcare needs using a state health survey data set.Methods: Adults residents of Ohio responding to the 2015 Ohio Medicaid Assessment Survey were included in the analysis. Ohio's 88 counties were classified into quartiles according to the Gini coefficient of income inequality. The primary outcome was a composite of self-reported unmet dental care, vision care, mental healthcare, prescription medication, or other healthcare needs within the past year. Unmet healthcare needs were compared according to county inequality quartile using weighted logistic regression.Results: The analytic sample included 37,140 adults. The weighted proportion of adults with unmet healthcare needs was 28%. In multivariable logistic regression, residents of counties in the highest (odds ratio [OR]=1.13, 95% confidence interval [CI]: 1.01–1.26; p=0.030) and second-highest (OR=1.16, 95% CI: 1.04–1.30; p=0.010) quartiles of income inequality experienced more unmet healthcare needs than residents of the most equal counties.Conclusion: Higher county-level income inequality was associated with individual unmet healthcare needs in a large state survey. This finding represents novel evidence for an individual-level association that may explain aggregate-level associations between community economic inequality and population health outcomes.

Income Inequality and Economic Development Incentives in US States: Robin Hood in Reverse?

This paper explores the relationship between the rising use of economic development incentives (EDI) and rising income inequality within U.S. states. It extends the few papers which investigate state and local income inequality outcomes in the U.S. (Goetz et al., 2011; Shuai, 2015) in three important ways. First, it provides a normative argument for reducing inequality as a policy goal, an issue commonly ignored in empirical applications of inequality. Second, it discusses the channels through which EDI policy can influence equality outcomes in a regional context. Finally, it estimates panel data models for 41 states from 2000 to 2009 using direct measures of EDI and three common measures of income inequality: Gini, top 1 percent income share and top 10 percent income share. The results reveal positive and statistically significant relationships between the one-year lag of EDI values and the three inequality measures. Taken as a whole, the results are consistent with a reverse-Robin-Hood effect where more generous EDI use is associated with redistribution of income from the bottom 90 percent to the top 10 percent of the income distribution.

The Local Spillover Effect of Corporate Accounting Misconduct: Evidence from City Crime Rates

This study documents a spillover effect of accounting fraud by showing that after the revelation of accounting misconduct there is an increase in financially motivated neighborhood crime (robberies, thefts, etc.) in the cities where these misconduct firms are located. We find that more visible accounting frauds (e.g., greater media attention and larger stock price declines) are more strongly associated with a future increase in financially motivated neighborhood crime. Our findings are consistent with the general strain theory put forth by Agnew (1992), where individuals facing strain are more likely to commit financially motivated crime. In our setting, we predict that adverse shocks stemming from the fraud, strains local communities leading to the increase in the rate of financially motivated crime. Consistent with our predictions we find that the association between fraud revelation and increased future financially motivated crime is strongest when local city-wide unemployment increases, where local job markets are shallower, and where local income inequality is high.

Outward migration may alter population dynamics and income inequality

Climate change impacts may drive affected populations to migrate. However, migration decisions in response to climate change could have broader effects on population dynamics in affected regions. Here, I model the effect of climate change on fertility rates, income inequality, and human capital accumulation in developing countries, focusing on the instrumental role of migration as a key adaptation mechanism. In particular, I investigate how climate-induced migration in developing countries will affect those who do not migrate. I find that holding all else constant, climate change raises the return on acquiring skills, because skilled individuals have greater migration opportunities than unskilled individuals. In response to this change in incentives, parents may choose to invest more in education and have fewer children. This may ultimately reduce local income inequality, partially offsetting some of the damages of climate change for low-income individuals who do not migrate. Climate change may drive migration from affected regions. This study shows that, because skilled individuals will have greater migration opportunities, climate change may lead parents to have fewer children and invest more in each individual child, with consequences for local income inequality.

Income inequality, economic growth, and subjective well-being: Evidence from China

Cross-national and longitudinal studies have previously shown mixed results on income inequality and life satisfaction, as income inequality is associated with other social trends that may affect life satisfaction differentially. This article examines the impact of income inequality on subjective wellbeing in China, where sharply rising inequality has been accompanied by rapid economic growth over the past decades. Based on a series of Chinese General Social Survey (CGSS) data, we show that life satisfaction increased from 2003 to 2010, despite a dramatic rise in income inequality during the same period. Cross-sectional analysis of the CGSS in 2005, matched with prefectural-level statistics, reveals that the local economic growth rate has a positive effect, but local income inequality has a negative effect, on individuals’ life satisfaction. Provincial panel data analysis further confirms the negative effect of income inequality on life satisfaction at the aggregate level. Our findings help to clarify the mixed results in previous studies and point to the importance of both economic and social policies in improving subjective well-being in China’s transitional economy.

Household Debt and Income Inequality: Evidence from Italian Survey Data

Does regional income inequality affect a household’s likelihood of being indebted? This question is addressed by using survey data on Italian households. The analysis shows that inequality in the regional income distribution has a negative effect on the probability of being indebted. In addition, richer households living in regions with greater income inequality have a greater likelihood of being indebted than similarly rich households residing in regions with low income inequality (and vice versa for poorer households). The study suggests that supply factors are more important than demand factors in explaining this result. These findings are consistent with the latest survey-based evidence drawn from US data which suggests that banks may use local income inequality and a household’s position in the income distribution to make inferences about an applicant’s underlying default risk. These results hold after controlling for socio-demographic differences, different types of debt, unobserved household heterogeneity using panel data and a number of robustness checks.

HUBUNGAN TANGGAPAN DAN SIKAP WARGA KOTA MADIUN TERHADAP MEMBAYAR ZAKAT/ JIZYAH SEBAGAI SUMBER APBN/APBD

&lt;p&gt;Between Budget and Budget State Local Income in equality especially lower budget from&lt;br /&gt;the budget, and 50%-60% Budget spent for paying employees the reasons is the lack of&lt;br /&gt;participation of citizens to fund the management of the state by paying the zakat (Muslim)&lt;br /&gt;jizyah (non-Muslim). The purpose of this study was to determine the response and attitude of&lt;br /&gt;the towns people Madiun to pay Zakat/jizyah as a source of state budget/budget. This research&lt;br /&gt;was conducted in Madiun by taking a sample of three villages of nine districts. The method is&lt;br /&gt;quantitative with ex-post facto design, collection document and questionnaire data and data&lt;br /&gt;product moment correlation analysis (T test). Results zero hypothesisis accepted because&lt;br /&gt;t0(0.059) is smaller than tt(1.96) level significansi 5% or 1% (2.59), this shows that a person's&lt;br /&gt;response to the zakat/jizyah as a source of state budget/budgetis proportional. Or no difference&lt;br /&gt;in the attitude of paying zakat/jizyah, both of whichare clear about the function of zakat, is&lt;br /&gt;being, or less. Respondents who understand the positive response is proportional to attitudes,&lt;br /&gt;respondents were then negative response is proportional to the negative attitude; respondents&lt;br /&gt;were not sure what it is a very negative response is proportional to the extremely negative&lt;br /&gt;attitude or do not pay zakat.&lt;br /&gt;&lt;br /&gt;&lt;/p&gt;

Economic inequality and belief in meritocracy in the United States

How does the context of income inequality in which people live affect their belief in meritocracy, the ability to get ahead through hard work? A prominent recent study by Newman, Johnston, and Lown argues that, consistent with the conflict theory, exposure to higher levels of local income inequality leads lower-income people to become more likely to reject—and higher-income people to become more likely to accept—the dominant United States ideology of meritocracy. Here, we show that this conclusion is not supported by the study’s own reported results and that even these results depend on pooling three distinctly different measures of meritocracy into a single analysis. We then demonstrate that analysis of a larger and more representative survey employing a single consistent measure of the dependent variable yields the opposite conclusion. Consistent with the relative power theory, among those with lower incomes, local contexts of greater inequality are associated with more widespread belief that people can get ahead if they are willing to work hard.

Economic Inequality and Class Consciousness

Do contexts of greater income inequality spur the disadvantaged to achieve a class consciousness vital to contesting the fairness of the economic system and demanding more redistribution? One prominent recent publication, the 2015 study by Newman, Johnston, and Lown, argues that simple exposure to higher levels of local income inequality lead low-income people to view the United States as divided into haves and have-nots and to see themselves as among the have-nots, that is, to become more likely to achieve such a class consciousness. Here, we show that this sanguine conclusion is at best supported only in analyses of the single survey presented in that study. There is no evidence that higher levels of income inequality produce greater class consciousness among those with low incomes in other similar but neglected surveys.

The associations between US state and local social spending, income inequality, and individual all-cause and cause-specific mortality: The National Longitudinal Mortality Study

ObjectiveTo investigate government state and local spending on public goods and income inequality as predictors of the risks of dying. MethodsData on 431,637 adults aged 30–74 and 375,354 adults aged 20–44 in the 48 contiguous US states were used from the National Longitudinal Mortality Study to estimate the impacts of state and local spending and income inequality on individual risks of all-cause and cause-specific mortality for leading causes of death in younger and middle-aged adults and older adults. To reduce bias, models incorporated state fixed effects and instrumental variables. ResultsEach additional $250 per capita per year spent on welfare predicted a 3-percentage point (−0.031, 95% CI: −0.059, −0.0027) lower probability of dying from any cause. Each additional $250 per capita spent on welfare and education predicted 1.6-percentage point (−0.016, 95% CI: −0.031, −0.0011) and 0.8-percentage point (−0.008, 95% CI: −0.0156, −0.00024) lower probabilities of dying from coronary heart disease (CHD), respectively. No associations were found for colon cancer or chronic obstructive pulmonary disease; for diabetes, external injury, and suicide, estimates were inverse but modest in magnitude. A 0.1 higher Gini coefficient (higher income inequality) predicted 1-percentage point (0.010, 95% CI: 0.0026, 0.0180) and 0.2-percentage point (0.002, 95% CI: 0.001, 0.002) higher probabilities of dying from CHD and suicide, respectively. ConclusionsEmpirical linkages were identified between state-level spending on welfare and education and lower individual risks of dying, particularly from CHD and all causes combined. State-level income inequality predicted higher risks of dying from CHD and suicide.

Do Economic Development Efforts Benefit All? Business Attraction and Income Inequality

This paper extends the current literature on county-level income distribution in the United States by explicitly exploring the effect of business-attraction efforts by state governments. Using county-level job attraction and retention data from 2000 to 2005 in Virginia to explain the income distribution from 2006 to 2010, while controlling for demographic and socioeconomic conditions of local communities, this study shows that bringing in manufacturing jobs can reduce income inequality at the local level while attracting jobs in professional and business services tends to increase local income inequality. The results indicate that state and local governments’ efforts to attract and retain manufacturing jobs help improve local income distribution.

False Consciousness or Class Awareness? Local Income Inequality, Personal Economic Position, and Belief in American Meritocracy

Existing research analyzes the effects of cross-national and temporal variation in income inequality on public opinion; however, research has failed to explore the impact of variation in inequality across citizens’ local residential context. This article analyzes the impact of local inequality on citizens’ belief in a core facet of the American ethos—meritocracy. We advance conditional effects hypotheses that collectively argue that the effect of residing in a high-inequality context will be moderated by individual income. Utilizing national survey data, we demonstrate that residing in more unequal counties heightens rejection of meritocracy among low-income residents and bolsters adherence among high-income residents. In relatively equal counties, we find no significant differences between high- and low-income citizens. We conclude by discussing the implications of class-based polarization found in response to local inequality with respect to current debates over the consequences of income inequality for American democracy.

The German miracle or the miracle of the cultural attitude

Purpose– The purpose of this paper is to explore the link between redistribution, convergence and local cultural capital (as defined by culture-based development concept).Design/methodology/approach– The paper infers the basic mechanism of the cultural dependence of convergence and inequality – through an empirical test for the case of the “German job miracle” during the current crisis. Two empirical questions are asked: first, is local income inequality associated with local cultural capital and second, is the negative convergence between East and West Germany during the crisis related to culturally sensitive employers’ preference for job preservation vs job loss. An OLS enquiry and two deeper estimation methods (a logit model and a 3SLS simultaneous equations model) are alternatively applied in order to triangulate the empirical results.Findings– The findings support the existence of cultural effect on local income inequality and cultural path dependence of employers’ preferences for job preservation vs job loss in a condition of economic shock.Originality/value– The paper provides both theoretical reasoning and empirical illustration of the significance of the cultural effect on human preferences which may or may not allow for redistribution and convergence between localities.