Household Debt, Economic Conditions, and Income Inequality: A State Level Analysis
This paper uses OLS regressions to understand the relationship between household debt, income inequality, and economic growth in the United States. For robustness we use two different measures of income inequality. The results show that, for the period 2003–2012, there is statistical evidence that increases in household debt are associated with lower levels of economic growth and higher rates of unemployment. In addition, we uncover evidence that high growth rates in household debt are associated with negative growth in income inequality, likely because debt caused economic growth to slow, diminishing the returns of top earners.
MSU Digital Commons Citation
Berisha, Edmond and Meszaros, John, "Household Debt, Economic Conditions, and Income Inequality: A State Level Analysis" (2017). Department of Economics Faculty Scholarship and Creative Works. 26.