Scandinavian Working Papers in Economics

Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

No 304: The Geography of Inequality: Difference and Determinants of Wage and Income Inequality across US Metros

Richard Florida () and Charlotta Mellander ()
Additional contact information
Richard Florida: University of Toronto
Charlotta Mellander: Jönköping International Business School

Abstract: This paper examines the geographic variation in inequality, and it distinguishes between wage and income inequality. Wage inequality is associated with skills, human capital, technology and metro size - in line with the literature on skill-biased technical change. Income inequality is instead more closely associated with race, poverty, lower levels of unionization and lower taxes. This suggests that income inequality is a product not only of skill-biased technical change, but also of the enduring legacy of race and poverty at the bottom of the socio-economic order, as well as the unraveling of the post-war social compact between capital and labor.

Keywords: inequality; income; wage; high-tech; skills

JEL-codes: J24; O10; O33; R00

34 pages, April 12, 2013

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