An Econometric Analysis of the Links Between Income Inequality and Economic Growth

  • Yohannes G. Hailu
  • Tesfa G. Gebremedhin
  • Randall W. Jackson


This study investigates temporal demographic changes and income inequalities, and more importantly the relationship between income inequality and economic growth inWest Virginia. Departing from earlier studies, a regional growth model is utilized and empirically tested using county level West Virginia data (1990-2000). Results suggest that per-capita income change is positively related to population and employment changes but negatively related to income inequality. This empirical evidence indicates that higher income inequality can potentially hinder economic growth.