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

Vitor Melo () and Stephen Miller ()
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Vitor Melo: Clemson University
Stephen Miller: Sorrell College of Business Troy University

Public Choice, 2022, vol. 192, issue 1, No 5, 99-114

Abstract: 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.

Keywords: Rent seeking; Inequality; Income distribution (search for similar items in EconPapers)
JEL-codes: D63 D72 H10 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11127-022-00973-7

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