Projecting the Income Distribution in a Regional Economy

A relatively simple method of projecting a regional income distribution based on a regional econometric model is presented. The model, which is similar to the regional model archetype presented by Glickman, projects manpower demand and supply, and from these quantities predicts the distribution of earnings and income as part of a large-scale economic-demographic model. The detailed population submodel, which plays a key role in the manpower-income distribution submodel, links an age-sex-race distribution of the population to the economic model via the determination of net civilian migration to a region. However, a number of restrictive assumptions are required: in particular, simulation of the labor market in the form of a job-competition model. The model is applied to the state of Alaska. The simulations demonstrate the model can be used to examine important distributional issues in a regional context. Work in progress is concentrating on increasing the degree of distributional detail and on relaxing some of the assumptions.