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An examination of the effect of immigration on income inequality: A Gini index approach

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  • Brian Hibbs

    (Indiana University South Bend)

  • Gihoon Hong

    (Indiana University South Bend)

Abstract

This paper examines the impact of immigration on income inequality. Using data from 1990 and 2000 US Censuses, we link the changes in income inequality as measured by the Gini index with immigrant flows into each metropolitan area in the U.S. We address endogeneity of immigrant inflows by relying on variation in historical distribution of earlier immigrants from each source country. The results suggest that using the Gini index as a measure of income inequality results in immigration having stronger effects on inequality than the findings of other studies based on changes in skill-related wage premiums. Interestingly, low-skilled immigration as proxied by Mexican immigration is found to have little effect on income inequality. However, the estimates are subject to a downward bias if native workers respond to an increase in low-skilled immigration by moving away from the affected locations.

Suggested Citation

  • Brian Hibbs & Gihoon Hong, 2015. "An examination of the effect of immigration on income inequality: A Gini index approach," Economics Bulletin, AccessEcon, vol. 35(1), pages 650-656.
    • Handle: RePEc:ebl:ecbull:eb-14-00571
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    References listed on IDEAS

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    Cited by:

    1. Giacomo DiPasquale, 2022. "The Effects of International Immigration on Inequality in Host Countries: the Case of Italy," Journal of International Migration and Integration, Springer, vol. 23(4), pages 1793-1824, December.
    2. Berman, Yonatan & Aste, Tomaso, 2016. "To what extent does immigration affect inequality?," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 462(C), pages 1029-1039.
    3. Stefan Jestl & Sandra M. Leitner & Sebastian Leitner, 2022. "The relative impact of different forces of globalization on wage inequality: A fresh look at the EU experience," Review of International Economics, Wiley Blackwell, vol. 30(4), pages 1003-1037, September.
    4. Ayfer Ozyilmaz & Yuksel Bayraktar & Esme Isik & Metin Toprak & Mehmet Firat Olgun & Serdar Aydin & Tuncay Guloglu, 2022. "The Impact of Refugees on Income Inequality in Developing Countries by Using Quantile Regression, ANN, Fixed and Random Effect," Sustainability, MDPI, vol. 14(15), pages 1-16, July.
    5. Ryan H. Murphy & Alex Nowrasteh, 2017. "US Immigration Levels, Urban Housing Values, and their Implications for Capital Share," Economic Affairs, Wiley Blackwell, vol. 37(3), pages 411-421, October.
    6. Rhea Ravenna Sohst & Alessio Fusco & Philippe Van Kerm, 2024. "Foreign-born households’ contribution to inequality and polarization in European income distributions," LISER Working Paper Series 2024-06, Luxembourg Institute of Socio-Economic Research (LISER).
    7. Qiao, Kunyuan & Dowell, Glen, 2022. "Environmental concerns, income inequality, and purchase of environmentally-friendly products: A longitudinal study of U.S. counties (2010-2017)," Research Policy, Elsevier, vol. 51(4).

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    More about this item

    Keywords

    immigration; income inequality; Gini index;
    All these keywords.

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • D6 - Microeconomics - - Welfare Economics

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