Do Economic Development Efforts Benefit All? Business Attraction and Income Inequality

Xiaobing Shuai
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Xiaobing Shuai: University of Richmond

The Review of Regional Studies, 2015, vol. 45, issue 1, 35-56

Abstract: This paper extends the current literature on county-level income distribution in the United States by explicitly exploring the effect of business-attraction efforts by state governments. Using county-level job attraction and retention data from 2000 to 2005 in Virginia to explain the income distribution from 2006 to 2010, while controlling for demographic and socioeconomic conditions of local communities, this study shows that bringing in manufacturing jobs can reduce income inequality at the local level while attracting jobs in professional and business services tends to increase local income inequality. The results indicate that state and local governments’ efforts to attract and retain manufacturing jobs help improve local income distribution.

Keywords: economic development; income distribution; inequality; business attraction (search for similar items in EconPapers)
JEL-codes: J31 O25 R58 (search for similar items in EconPapers)
Date: 2015
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