National and Regional Patterns of Convergence and Divergence
Edited by John Adams and Francesco Pigliaru
Chapter 7: Per capita earnings inequality across regions and states in the United States: trends, sources determinants
Page 183 7. Per capita earnings inequality across regions and states in the United States: trends, sources, determinants Andrew M. Sum and Walter N. Fogg INTRODUCTION In the previous chapter, trends in inequality in per capita personal incomes across regions and states in the US were identified and assessed. Findings revealed a marked decline in inequality among regions and states over the entire 1929–96 period, a trend toward convergence in all decades except the 1980s, and a renewal of convergence trends in the 1990s. Per capita market incomes (wages, salaries, property incomes) remain more unequally distributed than per capita personal incomes which include government transfers, and national and state personal tax policies have a further moderating effect on state income inequality. Although inequalities in property income do contribute to remaining income inequalities across states, the bulk of the differences is attributable to earnings from employment.1 This chapter is designed to identify and analyse inequality in per capita earnings from employment across regions and states in the US over the 1979–95 period. The analysis will begin with an examination of the relative importance of earnings as a source of the personal incomes of state residents and analyse the degree of inequality in per capita earnings across states over the 1989–96 period. This will be followed by an analysis of the economic, labour market and demographic forces influencing the per capita earnings of state residents and the contribution of each of these sources to remaining inequality in per capita...
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