How Does Income Inequality Impact Economic Growth in the United States?

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A rise in the Gini index correlates with a significant drop in median income, indicating income inequality adversely affects economic growth.
In 2010, a 0.01 increase in the Gini coefficient led to a $12,590 decrease in median income, highlighting the wealth gap's impact.
Linear regression was employed to assess the relationship between median income and the Gini index, utilizing an instrumental variable approach.
Findings suggest that the negative impact of income inequality on economic growth may be diminishing, as seen in the comparison between years.

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Statistical analysis reveals how income inequality affects median income and economic growth across counties.

Srini Venkatesh (2025) studied this question.

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