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Estimating the Effect of Rent-Seeking on income distribution: an analysis of U.S. States and Counties

Author

Listed:
  • Vitor Melo

    (Clemson University)

  • Stephen Miller

    (Sorrell College of Business Troy University)

Abstract

Prior empirical research on rent seeking has focused on estimating its effects on overall macroeconomic performance, with few studies attentive to income distribution. This paper expands on existing research by evaluating rent seeking’s effects on Gini coefficients, and income shares at the US state and county levels. We explore county-level panel data from the Census of Employment & Wages, adopting the percentages of workers employed in legal services and local government as proxies for rent seeking. We find that the estimated effects of rent seeking on the income distribution are significant and positive at all levels of analysis. However, rent seeking’s impact on the distribution of income is much more prominent at the state than at the county level. The results also suggest that the effect of rent seeking on the income distribution works by different mechanisms at the county level than it does at the state level.

Suggested Citation

  • Vitor Melo & Stephen Miller, 2022. "Estimating the Effect of Rent-Seeking on income distribution: an analysis of U.S. States and Counties," Public Choice, Springer, vol. 192(1), pages 99-114, July.
    • Handle: RePEc:kap:pubcho:v:192:y:2022:i:1:d:10.1007_s11127-022-00973-7
    DOI: 10.1007/s11127-022-00973-7
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Rent seeking; Inequality; Income distribution;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H10 - Public Economics - - Structure and Scope of Government - - - General

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