Metropolitan-nonmetropolitan distinctions in the determinants of family income inequality

Abstract

We examine family income inequality using 1990 Census of Population data for the 3,109 counties and independent cities in the 48 contiguous United States. Numerous characteristics of counties are examined for their role in influencing county income inequality. We particularly focus on differences in labor market effects on income inequality between metropolitan and nonmetropolitan areas. This comparison can help policy makers decide whether nonmetro areas should receive more emphasis in national and state and local economic development policies. We find that nonmetro counties are more affected by labor market factors than metro counties, suggesting additional policies aimed at nonmetropolitan areas to reduce income inequality.