Who Gets What? The Politics of Income Inequality in the United States.

This paper addresses the functioning of the governing system of the United States and theories of welfare policy by analyzing distributional outcomes from 1947-2000. The key question of this paper is whether public policy influences distributional outcomes. The macro politics model of the U.S. governing system (Erikson, MacKuen, and Stimson 2002) and the power resources theory of welfare policy (Huber, Ragan, and Stephens 1993) suggest that left policies should equalize the distribution of income. I utilize single equation error correction models to assess the impact of policy on income inequality through two mechanisms - the manipulation of economic opportunity and redistribution. Since nearly every government action influences economic opportunity, I examine policy in the aggregate rather than focusing only on policies explicitly designed to redistribute income. The analysis indicates that policy influences inequality through both mechanisms, with left policy producing more equality. The results support power resources theory and the macro politics model, demonstrating that political choices are an important determinant of distributional outcomes. Furthermore, the manipulation of economic opportunity is as important as, and works in tandem with, explicit redistribution. [ABSTRACT FROM AUTHOR]