Date of Graduation
Master of Science in Applied Economics (MSAE)
College of Arts and Sciences
Dr. Jesse Anttila-Hughes
This paper examines the relationship between income inequality and economic complexity, adding to the literature by providing new evidence for Metropolitan Statistical Areas (MSAs). With populations in cities rapidly increasing world-wide, settlement scaling research has revealed significant correlations between population size and various aspects of socio-economic wellbeing, including income inequality. Our study utilizes the Economic Complexity Index (ECI), a recently developed measure of economic development, to examine how changes in regional production structures influence inequality and shed light on the evolving nature of urban economies. By employing fixed effects OLS regression with clustered standard errors on both panel data from 2010-2019 and a 2019 cross-section, we discover a positive and statistically significant relationship between ECI and income inequality as measured by the Gini Index across US MSAs. The finding from this data suggests a Simpson’s paradox, and contributes to our understanding of high complexity, high inequality areas. Our results shed light on the differential effects from economic diversification strategies.
Johnson, Brooke, "The Relationship Between Economic Complexity and Income Inequality: A study on the United States Metropolitan Statistical Areas" (2023). Master's Theses. 1508.
Available for download on Saturday, July 11, 2026