Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/95570
Authors: 
Huber, Evelyne
Stephens, John D.
Year of Publication: 
2013
Series/Report no.: 
LIS Working Paper Series 602
Abstract: 
This article analyzes the determinants of market income distribution and governmental redistribution. The dependent variables are LIS data on market income inequality (measured by the Gini index) for households with a head aged 25 to 59 and the percent reduction in the Gini index by taxes and transfers. We test the generalizability of the Goldin/Katz hypothesis that inequality has increased in the United States because the country failed to invest sufficiently in education. The main determinants of market income inequality are (in order of size of the effect) family structure (single mother households), union density, deindustrialization, unemployment, employment levels, and education spending. The main determinants of redistribution are (in order of magnitude) left government, family structure, welfare state generosity, unemployment, and employment levels. Redistribution rises mainly because needs rise (that is, unemployment and single mother households increase), not because social policy becomes more redistributive.
Subjects: 
inequality
welfare state
redistribution
JEL: 
H53
I38
J31
Document Type: 
Working Paper
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