Replication Data for: Chasing Disparity: Economic Development Incentives and Income Inequality in the U.S. States

Scholars have traditionally looked at the role of welfare and tax policies in shaping income inequality. Less attention has been paid to the key policy area of economic development. But, states spend billions on economic development incentives each year in order to encourage firms to locate in their state. I argue that increased incentive spending could lead to increased inequality through a market conditioning effect or a redistributive effect. These mechanisms are tested using data on incentive spending and inequality across the fifty states from 1999-2014. The findings demonstrate that incentives increase income inequality by reducing redistribution over the long run. Despite using economic development incentives to try to generate greater prosperity, state governments may be inadvertently exacerbating inequality.