Impact of Small Employers on Income Inequality

Income inequality in the United States has increased substantially over the last four decades. This paper attempts to analyze the relationship between the small employers and income inequality (as measured by the Gini index). Other explanatory variables include the natural logarithm of real GDP, percentage of income from retirement income, percentage of income from social security, unemployment rate, percentage of population that identifies as a minority, percentage of population with a high school education, urban population share, and median age. A negative association between income inequality and small employers is hypothesized and supported by the linear regression model in this study