Graduate Program

Economics

Degree Name

Master of Arts (MA)

Semester of Degree Completion

Spring 2021

Thesis Director

Ahmed S. Abou-Zaid

Thesis Committee Member

Ali R. Moshtagh

Thesis Committee Member

Teshome Abebe

Abstract

This paper analyzes the impacts of education achievement, percentage of households led by a single parent, the percentage of minority population, per capita personal income, percentage of population over 65 years old, and minimum wage on income inequality in 9 southeastern states of the United States, as well as the effects of these variables on poverty, measured as the percentage of the population below poverty level. These southeastern states are Alabama, Arkansas, Georgia, Florida, Louisiana, Mississippi, Oklahoma, Tennessee, and South Carolina. The period of time used for this analysis is from 2000 to 2019. Panel data was used for this research, and two separate random effect models:

1. Model 1: Determinants of poverty

2. Model 2: Determinants of income inequality

Another important variable added to these models is a dummy variable representing the Great Recession. The variable is defined as 0 if the period is before the Great Recession, and 1 if the period is after the Great Recession. As we all know, the Great Recession was the largest economic meltdown in the U.S. since the Great Depression, which lasted a little over 18 months. The Great Recession affected GDP, which contracted steeply, and then the economy started to grow again.

How did the Great Recession affect poverty and income inequality? The empirical results show a positively significant relationship between the dummy variable and poverty; but seems to be insignificant in the income inequality model

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