Date on Master's Thesis/Doctoral Dissertation

8-2004

Document Type

Doctoral Dissertation

Degree Name

Ph. D.

Department

Urban and Public Affairs

Committee Chair

Bourassa, Steven C., 1957-

Author's Keywords

Metropolitan statistical areas; Technological change; Economic growth; Income inequality; Nineteen 90s

Subject

Income distribution; Occupational training--Economic aspects; Academic achievement--Economic aspects

Abstract

Employing a two-stage least-squares multiple regression technique using cross-sectional data from metropolitan statistical areas (MSAs) as the unit of analysis, this study is designed to detect the indirect effect of skill-biased technological change (SBTC) on household income inequality through changes in the rate of per capita economic growth over the decade of the 1990s. If recent technological changes are skill-biased and tend to raise inequality, as much previous research has suggested, and if such technological changes are a relatively large determinant of economic growth, then we should be able to observe a positive association between technology-driven economic growth and income inequality, all else constant. However, the data and method employed here could not establish support for this hypothesis. Instead, the measures of technological change employed in this study are found to raise per capita economic growth, but economic growth is found to decrease, not increase, household income inequality. In a related vein, this research study seeks to test the theory of an extended or reformulated Kuznets Curve Hypothesis in which economic growth and income inequality might be positively correlated due to structural changes in advanced post-industrial economies. This reformulated Kuznets Curve Hypothesis is linked to the theory that growth and inequality might both be related to SBTC resulting from structural shifts away from a mature industrial economy and toward the emerging information and knowledge economy of the 1990s and beyond. This theory, too, must be rejected based upon the findings presented here. Instead, economic growth is found to be negatively correlated with changes in household income inequality in metropolitan areas over the 1990s, confirming the original Kuznets Hypothesis that rising economic growth compresses the income distribution. Other variables are also found to explain variations in household income inequality in metropolitan areas over the decade, including changes in educational inequality, population growth rates, and changes in black-nonblack housing segregation. Overall, the findings presented here suggest that (1)further work must be done to substantiate the SBTC explanation for rising income inequality, (2)the effects of technological change may have little or no impact on inequality through economic growth, (3)the original Kuznets Curve Hypothesis appears to hold true even during periods of apparent structural change in an advanced post-industrial economy, and (4)numerous additional factors not identified by this study must be responsible for the variations in metropolitan household income inequality over the decade in question.

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