Trends in US Spatial Inequality: Concentrating Affluence and a Democratization of Poverty†

AEA Papers and Proceedings 2021, 111: 520–525 https://doi.org/10.1257/pandp.20211075 SPATIAL POLICIES Trends in US Spatial Inequality: Concentrating Affluence and a Democratization of Poverty By Cecile Gaubert, Patrick Kline, Damián Vergara, and Danny Yagan* Have US spatial income disparities grown log incomes across individuals, today county more or less pronounced in recent decades? income dispersion accounts for 10 percent of the While much has been made of the great di - ver variance across individuals. Including taxes and gence between highly skilled metropolitan areas transfers in the income measure reduces the level and the rest of the United States (Moretti 2012 of inequality ), , as does accounting for local price a central tenet of the regional growth literature variation. remains the “iron law of convergence,” that Next, we show that these trends in average per capita incomes tend to grow more rapidly per capita incomes mask substantial heteroge- in poorer areas (Barro and  Sala-i-Martin 1991; neity across the income distribution. Two broad Barro 2015; Ganong and  Shoag 2017). In this patterns emerge. First, there has been a “democ- paper, we study trends in income inequality ratization of poverty” across US counties, with across US states and counties over the period both adult and youth poverty rates converging 1960–2019, with particular attention to ho across counties in recent decades. w This pattern these trends depend on the notion of income is also reflected in a substantial deconcentra- considered and the feature of the income distri tion of means-tested transfers across counties. - bution used to rank communities. Likewise, in survey data, the bottom quantiles We begin by establishing that both states of posttransfer household income ha ve been and counties have been diverging in terms of converging across states since the early 1990s. per capita pretax incomes since the late 1990s, While...