The Geography of Inequality: Difference and Determinants of Wage and Income Inequality across US Metros

This paper examines the geographic variation in inequality, and it distinguishes between wage and income inequality. Wage inequality is associated with skills, human capital, technology and metro size - in line with the literature on skill-biased technical change. Income inequality is instead more closely associated with race, poverty, lower levels of unionization and lower taxes. This suggests that income inequality is a product not only of skill-biased technical change, but also of the enduring legacy of race and poverty at the bottom of the socio-economic order, as well as the unraveling of the post-war social compact between capital and labor.