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Employment Growth and Income Inequality: Accounting for Spatial and Sectoral Differences

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  • Pede, Valerien O.
  • Florax, Raymond J.G.M.
  • Partridge, Mark D.

Abstract

This paper revisits the inequality-growth relationship accounting for sectoral differences and focusing on US counties. For 8 two-digit industries of the NAICS classification, we estimated a conditional growth model where employment growth depends on regional income inequality and a number of control variables. Spatial econometrics techniques are used to account for spatial dependence. Results indicate that there is no association between employment growth and family income inequality for the Agriculture, Forestry, Fishing and Hunting sector and the Real Estate, Rental and Leasing sector. However, income inequality consistently shows a negative impact on employment growth in the construction sector, and results are mixed for other sectors such as: Manufacturing; Retail Trade; Professional Scientific and Technical Services; Accommodation and Food Services; Educational Services. In several sectors, mixed results were obtained when differentiation is made between urban and rural samples.

Suggested Citation

  • Pede, Valerien O. & Florax, Raymond J.G.M. & Partridge, Mark D., 2009. "Employment Growth and Income Inequality: Accounting for Spatial and Sectoral Differences," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49460, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea09:49460
    DOI: 10.22004/ag.econ.49460
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    Cited by:

    1. Charles-Coll, Jorge & Mayer Granados, Elisabeth L., 2017. "How much Inequality is Harmful for Growth? The Growth Maximizing Rate of Inequality in the Context of the Mexican Economy," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 70(3), pages 301-318.
    2. Charles-Coll, Jorge A., 2010. "The optimal rate of inequality: A framework for the relationship between income inequality and economic growth," MPRA Paper 28921, University Library of Munich, Germany.
    3. Jorge Alberto Charles Coll & Elizabeth Lizeth Mayer Granados & Nazhle Faride Cheín Schekaiban, 2018. "Desigualdad en el ingreso y crecimiento económico de los municipios mexicanos: el efecto natalidad - capital humano\Income inequality and economic growth in Mexican municipalities: The fertility - hu," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 33(2), pages 195-217.
    4. Vincent Leyaro, 2015. "Threshold and interaction effects in the trade, growth, and inequality relationship," WIDER Working Paper Series wp-2015-009, World Institute for Development Economic Research (UNU-WIDER).
    5. Adalgiso Amendola & Roberto Dell�Anno, 2014. "Income inequality and economic growth: an empirical investigation in Mediterranean countries," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - The Italian Journal of Economic, Demographic and Statistical Studies, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 68(2), pages 35-58, April-Jun.
    6. Vincent Leyaro, 2015. "Threshold and interaction effects in the trade, growth, and inequality relationship," WIDER Working Paper Series 009, World Institute for Development Economic Research (UNU-WIDER).
    7. T. Tavor & L. D. Gonen & M. Weber & U. Spiegel, 2018. "The Effects of Income Levels and Income Inequalities on Happiness," Journal of Happiness Studies, Springer, vol. 19(7), pages 2115-2137, October.
    8. Jorge Alberto Charles Coll, 2014. "Inequality and growth in the context of the Mexican economy: Does inequality matter for growth?," Working Papers 331, ECINEQ, Society for the Study of Economic Inequality.
    9. Khairul Amri & Nazamuddin, 2018. "Is There Causality Relationship Between Economic Growth And Income Inequality?: Panel Data Evidence From Indonesia," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 6(2), pages 8-20.

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    Keywords

    Community/Rural/Urban Development;

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