Macroeconomic Determinants of Inequality of Opportunity in the United States: 1970–2009
Gustavo Marrero () and
Juan Rodríguez ()
A chapter in Inequality after the 20th Century: Papers from the Sixth ECINEQ Meeting, 2016, vol. 24, pp 307-330 from Emerald Publishing Ltd
Abstract Conventional wisdom predicts that changes in macroeconomic conditions significantly affect income inequality. In this paper, we hypothesize that the way in which macroeconomic conditions affect inequality depends on how these conditions influence the constituents of total inequality: inequality of opportunity (IO) and inequality of effort (IE). Using the PSID database for the United States (1970–2009), we first decompose total inequality into these components. Then, we specify a dynamic model that relates each inequality component to a set of macroeconomic factors. Apart from real GDP and inflation rates, the most widely used factors in the literature, we also consider outstanding consumer credits and public welfare and health care expenditures. We find that real GDP and outstanding credits have a negative and significant effect upon IO and IE, while inflation has a positive and significant effect only on IE, and welfare expenditures have a negative and significant effect only on IO.
Keywords: Income inequality; inequality of opportunity; inequality of effort; growth cycle; outstanding consumer credit; D63; E32; O16; O51 (search for similar items in EconPapers)
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://www.emeraldinsight.com/10.1108/S1049-258520 ... RePEc&WT.mc_id=RePEc (text/html)
Access to full text is restricted to subscribers
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eme:reinzz:s1049-258520160000024013
Ordering information: This item can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
http://www.emeraldgr ... ies.htm?id=1049-2585
Access Statistics for this chapter
More chapters in Research on Economic Inequality from Emerald Publishing Ltd
Bibliographic data for series maintained by Charlotte Maiorana ().