Determinants of the Level and Distribution of Family Income in Metropolitan Areas, 1969.

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    • Abstract:
      The level and distribution of family income in 1969 varied widely across Standard Metropolitan Statistical Areas (SMSAs) in the United States. Stamford, Connecticut, had the highest median income, $15,862; Bristol, Connecticut, had the most equally distributed incomes, a Gini coefficient of .272. Of all the metropolitan areas, McAllen, Texas, was the poorest, with a median income of $4,776, as well as the most unequal, with a Gini coefficient of 469. In this paper a model of the determinants of this variation in income levels and size distributions is formulated and estimated. The model emphasizes the role of the industrial structure of the area. In the job competition model, the individual's earnings depend not on his own endowments, but on the job he acquires. The marginal product adheres not to the person, but to the job. Labor demand, not the background skills of the labor force, determines the number and types of jobs that exist. These depend on technology, interdependent preferences, and customary wage differentials in the workplace.