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An Analysis of The Effects of The Rapidly Growing Technology Industry on Income Inequality in The United States

Shawn Ngwena

Name: Shawn Ngwena
Major: Economics
Minor: Computer Science
Advisors: Prof Melanie Long, Prof Brooke Krause

Does everyone in the United States economy equally benefit from the growth of the technology industry in the country? Growing the US economy is amongst the primary goals of the US government and policymakers. Economic growth in the United States can be both a direct and indirect effect of the rapidly growing technology industry. However, there is increasing evidence of unequal distribution of benefits of economic growth specifically income and wealth. Thus, this study investigates the effects of the size of and concentration within the technology on income inequality, using data on 50 US states from 1970 –2015. We combined data from several sources to test the independent effects of the technology industry’s share of GDP, market concentration, education, unionization, and GDP/capita on the Gini coefficient. It shows that the development of the technology industry can have a reducing effect on income distribution inequality through the creation of multiple job opportunities across several industries. However, some indicators show that income inequality can potentially worsen due to having a growing technology industry biased towards skilled workers. Therefore, this study is an investigation of the relationship between the rapidly growing technology industry and income inequality in the United States. This research is interesting because as people in the future we are going to continue increasing our dependency on the technologies that we create, hence it is wise to have a clear understanding of ways in which these technological developments impact human life.

Posted in Comments Enabled, Independent Study, Symposium 2022.


2 responses to “An Analysis of The Effects of The Rapidly Growing Technology Industry on Income Inequality in The United States”

  1. David McConnell says:

    Hi Shawn, Nice presentation on a very important topic! It’s hard to believe almost 4 years have passed since our FYS. Congratulations on completing IS, and best of luck with the final weeks and with your post-graduation plans.

  2. Brooke Krause says:

    Your IS is such a fascinating topic to think about the ways that the increasing share of the tech sector relates to to income inequality! Thanks for studying this topic and sharing your research.

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