Working Papers

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1. From Migration to Inequality: Evidence from U.S. State-level Data

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Abstract: Inequality in the United States has been paid much attention by both theoretical and empirical economists, yet migration as a role is lack of discussion. This paper examines the effect of interstate migration on inequality in the United States using 1990-2015 state-to-state migration data from Internal Revenue Service. In general, a positive impact of migration on inequality has been found. Specifically, migration is helpful for reducing the inequality in origin state at the expense of destination state because skilled workers are more likely to migrate than unskilled workers according to the theory of Skilled Biased Technological Change. Additionally, the role of migration differs from people who are migrating and locations where do they migrate. Empirical results are robust to different estimation strategies.

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2. Revisiting the Inequality-Growth Nexus: What Do the Literature and Data Say?

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Abstract: The literature on inequality-growth relationship is large and still growing. Yet, the overall effect remains inconclusive. This paper reviews the existing inequality-growth literature by considering bi-directional causality and nonlinearity issues. We first attempt to summarize channels and model specifications in both directions respectively. After collecting the coefficients regarding the effect of inequality on growth, we show that estimations using cross sectional method are consistently negative while the panel regressions remain inconclusive. The main issues of estimation that have been raised in empirical studies are also provided.

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3. The Long-run Relationship between Inequality and Growth: A Convergence Approach

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Abstract: A rich literature has attempted to estimate the relationship between income inequality and economic growth across countries, among which results are generally plagued by dissension in either the sign or causality. Based on the newly proposed methods testing the convergence, this paper investigates the long-run relationship between income inequality and economic growth in a unique perspective. Both the relative convergence and weak-sigma convergence approaches demonstrate a divergent result for inequality but a convergent result for income which partially illustrates that there is no long-run relationship between income inequality and economic growth. The change of income inequality is attributed to the country specific policy rather than economic growth.