<p>This study analyzes the relationship between manufacturing sector dynamics and income inequality in the United States for the period 1965Q1-2019Q4 using the Quantitative Autoregressive Distributed Lag (QARDL) model. Analyses controlled for urbanization, economic growth, and human capital variables revealed results consistent with the inverted U-shaped Kuznets curve. The key finding is that an increase in the manufacturing sector's share of employment (SCₑ) is much more effective and consistent in reducing income inequality than an increase in its share of GDP (SCₘ). For robustness analysis, the ratio of the top 10%'s income to median income (90/50) was used as an alternative dependent variable, and the main results were confirmed. Accordingly, growth in manufacturing employment significantly narrows not only overall inequality but also the gap between the upper income group and the middle class. The study contributes to the literature by addressing the role of the manufacturing sector in structural transformation in terms of both production and employment, and points to the critical importance of inclusive growth strategies that focus on the sector's employment capacity for policymakers.</p>

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Examining the role of structural change in income inequality: insights from quantile ARDL modeling in the United States

  • Cumali Marangoz

摘要

This study analyzes the relationship between manufacturing sector dynamics and income inequality in the United States for the period 1965Q1-2019Q4 using the Quantitative Autoregressive Distributed Lag (QARDL) model. Analyses controlled for urbanization, economic growth, and human capital variables revealed results consistent with the inverted U-shaped Kuznets curve. The key finding is that an increase in the manufacturing sector's share of employment (SCₑ) is much more effective and consistent in reducing income inequality than an increase in its share of GDP (SCₘ). For robustness analysis, the ratio of the top 10%'s income to median income (90/50) was used as an alternative dependent variable, and the main results were confirmed. Accordingly, growth in manufacturing employment significantly narrows not only overall inequality but also the gap between the upper income group and the middle class. The study contributes to the literature by addressing the role of the manufacturing sector in structural transformation in terms of both production and employment, and points to the critical importance of inclusive growth strategies that focus on the sector's employment capacity for policymakers.