Working Paper: NBER ID: w28385
Authors: Cecile Gaubert; Patrick M. Kline; Damin Vergara; Danny Yagan
Abstract: We study trends in income inequality across U.S. states and counties 1960-2019 using a mix of administrative and survey data sources. Both states and counties have diverged in terms of per-capita pre-tax incomes since the late 1990s, with transfers serving to dampen this divergence. County incomes have been diverging since the late 1970s. These trends in mean income mask opposing patterns among top and bottom income quantiles. Top incomes have diverged markedly across states since the late 1970s. In contrast, bottom income quantiles and poverty rates have converged across areas in recent decades.
Keywords: Income Inequality; Spatial Disparities; Poverty Rates; Income Distribution
JEL Codes: E01; H2; R1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| per capita pretax incomes divergence (F29) | income inequality (D31) |
| county income dispersion accounts for growing share of individual income variance (D31) | understanding of spatial inequality (R12) |
| top incomes divergence across states (H73) | income inequality (D31) |
| bottom income quantiles convergence (D31) | democratization of poverty (I32) |
| adjustments for transfers dampen county-level inequality (H73) | income inequality trends (D31) |