Quotation Fischer, Manfred M., Huber, Florian, Pfarrhofer, Michael. 2021. The regional transmission of uncertainty shocks on income inequality in the United States. Journal of Economic Behavior and Organization. 183 887-900.




This paper explores the relationship between household income inequality and macro-economic uncertainty in the United States. Using a novel large-scale macroeconometric model, we shed light on regional disparities of inequality responses to a national uncertainty shock. The results suggest that income inequality decreases in most states, with a pronounced degree of heterogeneity in terms of the dynamic responses. By contrast, some few states, mostly located in the Midwest, display increasing levels of income inequality over time. Forecast error variance and historical decompositions highlight the importance of uncertainty shocks in explaining income inequality in most regions considered. Finally, we explain differences in the responses of income inequality by means of a simple regression analysis. These regressions reveal that the income composition as well as labor market fundamentals determine the directional pattern of the dynamic responses.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Journal of Economic Behavior and Organization
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, STRAT-A, VW-B, WH-A
Language English
Title The regional transmission of uncertainty shocks on income inequality in the United States
Volume 183
Year 2021
Page from 887
Page to 900
Reviewed? Y
URL https://www.sciencedirect.com/science/article/pii/S0167268119300654
DOI https://doi.org/10.1016/j.jebo.2019.03.004
Open Access N
JEL C11, C30, E3, D31


Fischer, Manfred M. (Details)
Huber, Florian (Former researcher)
Pfarrhofer, Michael (Former researcher)
Institute for Economic Geography and GIScience IN (Details)
Research areas (Ă–STAT Classification 'Statistik Austria')
1807 Economic geography (Details)
1810 Geographic Information Systems (GIS) (Details)
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