Income and Wealth Inequality

  • Nicholas Bloom
  • Raj Chetty
  • Emmanuel Saez

Leaders: Nicholas Bloom, Raj Chetty, Emmanuel Saez

The CPI is home to some of the country’s most influential analyses of the income and wealth distribution. The purpose of the Income and Wealth RG is to monitor the ongoing takeoff in income inequality, to better understand its sources, and to analyze its implications for labor market performance, educational attainment, mobility, and more. The following is a sampling of the CPI’s research projects within this area.

Trends in income and wealth inequality: What are the key trends in U.S. income and wealth inequality? The U.S. increasingly looks to Emmanuel Saez and his research team for the latest data on U.S. economic inequality.

Distributional National Accounts: In an ambitious infrastructural project, Emmanuel Saez and his team are building a “Distributional National Accounts” based on tax returns, a data set that will eliminate the current gap between (a) national accounts data based on economic aggregates and (b) inequality analysis that uses micro-level tax data to examine the distribution of income but is not consistent with national aggregates. This new data set will in turn make it possible to evaluate the extent to which economic growth, which has long been represented as a preferred poverty-reduction approach, is indeed delivering on that objective.

The rise of between-firm inequality: How much of the rise in earnings inequality can be attributed to increasing between-firm dispersion in the average wages they pay? This question can be addressed by constructing a matched employer-employee data set for the United States using administrative records.

Rent and inequality: It is increasingly fashionable to argue that “rent” accounts for much of the takeoff in income inequality. The Current Population Survey can be used to assess whether this claim is on the mark. 

Income And Wealth - CPI Research

Title Author Media
Social Capital and Inequality: The Significance of Social Connections Karen S. Cook

Social Capital and Inequality: The Significance of Social Connections

Author: Karen S. Cook
Date: 01/2014

The study of social connections and their consequences is central to social psychology and represents a growing field of inquiry in the social sciences more broadly. It is linked to the analysis of social networks and to what is called “social capital,” a term made popular by Robert Putnam. A major dimension of inequality in society is the extent of access to social capital, to connections that matter. Differential access to such resources is one of the most enduring features of social inequality and a key reason for its reproduction across time and space. Networks structure access and access to social capital is linked to variation in important life outcomes, revealing the significance of such factors for the study of inequality and its reproduction. Social capital has been linked to outcomes as diverse as health status, intellectual development, academic performance, employment opportunities, occupational attainment, entrepreneurial success or failure, and even juvenile delinquency, among other things. This chapter reviews some of the relevant theory and research on networks and inequality.

Why Status Matters for Inequality Cecilia L. Ridgeway

Why Status Matters for Inequality

Author: Cecilia L. Ridgeway
Publisher: Sage Publications
Date: 01/2014

To understand the mechanisms behind social inequality, this address argues that we need to more thoroughly incorporate the effects of status—inequality based on differences in esteem and respect—alongside those based on resources and power. As a micro motive for behavior, status is as significant as money and power. At a macro level, status stabilizes resource and power inequality by transforming it into cultural status beliefs about group differences regarding who is “better” (esteemed and competent). But cultural status beliefs about which groups are “better” constitute group differences as independent dimensions of inequality that generate material advantages due to group membership itself. Acting through micro- level social relations in workplaces, schools, and elsewhere, status beliefs bias evaluations of competence and suitability for authority, bias associational preferences, and evoke resistance to status challenges from low-status group members. These effects accumulate to direct members of higher status groups toward positions of resources and power while holding back lower status group members. Through these processes, status writes group differences such as gender, race, and class-based life style into organizational structures of resources and power, creating durable inequality. Status is thus a central mechanism behind durable patterns of inequality based on social differences. 

The Labor Force and the Great Recession Michael Hout, Erin Cumberworth

The Labor Force and the Great Recession

Author: Michael Hout, Erin Cumberworth
Date: 10/2012

The Great Recession and the slow recovery since have been the longest economic slump in seventy years. It affected vulnerable populations more than others. In this brief, our aim is to put this disaster into historical context, looking first at the overall state of the labor market and then at how the economic harm has been distributed across the population by gender, level of education, and race and ethnicity.

Consumption and the Great Recession Luigi Pistaferri, Ivaylo Petev

Consumption and the Great Recession

Author: Luigi Pistaferri, Ivaylo Petev
Date: 10/2012

The particular trauma of severe downturns is that declining consumer spending, itself a reaction to the economy's contraction, also undermines the prospects for recovery. Consumption is, in other words, a fundamental determinant of business cycles - a kind of litmus test of economic health. But it's not just an important determinant of future economic performance. We also look to consumption as an omnibus measure of the set of socioeconomic conditions that underlie consumer behavior, such as job opportunities, price fluctuations, access to credit, and financial security. In this recession brief, we offer an interpretation of recent consumption data in order to determine the extent of the economic damage and its unequal distribution across the American populace.

Family, the Lifecourse, and the Great Recession S. Philip Morgan, Erin Cumberworth, Christopher Wimer

Family, the Lifecourse, and the Great Recession

Author: S. Philip Morgan, Erin Cumberworth, Christopher Wimer
Date: 10/2012

The family is an important setting within which the Great Recession can exert its influence. Although the downturn directly affected many workers by reducing their earnings or forcing them into unemployment, it affected others indirectly by changing their living arrangements or family life. Further, the ways in which families are formed or broken up may be affected by the Great Recession, as it can alter the perceived costs and benefits of various family-relevant behaviors. Amid the turmoil and economic upheaval in the wider economy, individuals and families go about their lives, deciding to get married, suffering through breakups and divorces, planning families, and sorting out their living arrangements. The recession could have major effects on all of these family processes.

Income And Wealth - CPI Affiliates

Harold R. Kerbo Professor of Sociology California Polytechnic State University
Harry B. G. Gan... Professor of Sociology and Social Research Methodology Free University Amsterdam
Henryk Domanski Professor; Director, Institute of Philosophy and Sociology Polish Academy of Sciences
Hiroshi Ishida Professor University of Tokyo
Ira I. Katznelson Ruggles Professor of Political Science and History Columbia University


Income And Wealth - Other Research

Title Author Media
The Race Between Education and Technology Goldin, Claudia, Lawrence F. Katz

The Race Between Education and Technology

Author: Goldin, Claudia, Lawrence F. Katz
Publisher: Harvard University Press
Date: 03/2010
Rousseau: A Free Community of Equals Joshua Cohen

Rousseau: A Free Community of Equals

Author: Joshua Cohen
Publisher: Oxford University Press
Date: 01/2010

In famously beautiful and laconic prose, Jean- Jacques Rousseau presents us a forceful picture of a democratic society, in which we live together as free and equal, and our politics focuses on the common good. In Rousseau: Free Community of Equals Joshua Cohen explains how the values of freedom, equality, and community all work together as parts of the democratic ideal expressed in Rousseau's conception of the ‘society of the general will'. The book also explains Rousseau's anti-Augustinian and anti-Hobbesian idea that we are naturally good, shows why Rousseau thinks it is reasonable for us to endorse that idea, and discusses how our natural goodness might make a free community of equals possible for us. Cohen examines in detail Rousseau's picture of the institutions of a democratic society: why he emphasized the importance of political participation, how he argued against extreme inequalities, and what led him to embrace a civil religion as necessary for the society of the general will. This book provides an analytical and critical appraisal of Rousseau's political thought that, while frank about its limits, also explains its enduring power.

Immigration and Inequality David Card

Immigration and Inequality

Author: David Card
Publisher: NBER
Date: 01/2009
The Return of Depression Economics and the Crisis of 2008 Paul Krugman

The Return of Depression Economics and the Crisis of 2008

Author: Paul Krugman
Publisher: W. W. Norton & Company
Date: 12/2008
Trends in U.S. Wage Inequality: Revising the Revisionists David H. Autor, Lawrence F. Katz and Melissa S....

Trends in U.S. Wage Inequality: Revising the Revisionists

Author: David H. Autor, Lawrence F. Katz and Melissa S....
Publisher: Review of Economics and Statistics
Date: 04/2008

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