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
The Continuing Increase in Income Segregation, 2007-2012 Sean Reardon, Kendra Bischoff

The Continuing Increase in Income Segregation, 2007-2012

Author: Sean Reardon, Kendra Bischoff
Publisher:
Date: 03/2016

In this report, we use the most recent data from the American Community Survey to investigate whether income segregation increased from 2007 to 2012. These data indicate that income segregation rose modestly from 2007 to 2012. This continues the trend of rising income segregation that began in the 1980s. We show that the growth in income segregation varies among metropolitan areas, and that segregation increased rapidly in places that experienced large increases in income inequality. This suggests that rising income inequality continues to be a key factor leading to increasing residential segregation by income.

Childhood Environment and Gender Gaps in Adulthood Raj Chetty, Nathaniel Hendren, Frina Lin, Jeremy Majerovitz, Benjamin Scuderi

Childhood Environment and Gender Gaps in Adulthood

Author: Raj Chetty, Nathaniel Hendren, Frina Lin, Jeremy Majerovitz, Benjamin Scuderi
Publisher: NBER
Date: 02/2016

We show that differences in childhood environments play an important role in shaping gender gaps in adulthood by documenting three facts using population tax records for children born in the 1980s. First, gender gaps in employment rates, earnings, and college attendance vary substantially across the parental income distribution. Notably, the traditional gender gap in employment rates is reversed for children growing up in poor families: boys in families in the bottom quintile of the income distributionare less likely to work than girls. Second, these gender gaps vary substantially across counties and commuting zones in which children grow up. The degree of variation in outcomes across places is largest for boys growing up in poor, single-parent families. Third, the spatial variation in gender gaps is highly correlated with proxies for neighborhood disadvantage. Low-income boys who grow up in high-poverty, high-minority areas work significantly less than girls. These areas also have higher rates of crime, suggesting that boys growing up in concentrated poverty substitute from formal employment to crime. Together, these findings demonstrate that gender gaps in adulthood have roots in childhood, perhaps because childhood disadvantage is especially harmful for boys.

State of the Union 2016: Wealth Inequality Gabriel Zucman

State of the Union 2016: Wealth Inequality

Author: Gabriel Zucman
Publisher:
Date: 02/2016

Over the past four decades, only the very rich, the top 0.1 percent, have realized wealth increases in the U.S. In 2012, the top 0.1 percent included 160,000 households with total net assets of more than 20 million. At the same time, the middle class, those in the 50th-90th percentiles, have experienced a decline in their wealth share.

State of the Union 2016: Income Inequality Jonathan Fisher, Timothy Smeeding

State of the Union 2016: Income Inequality

Author: Jonathan Fisher, Timothy Smeeding
Publisher: Stanford Center on Poverty and Inequality
Date: 02/2016

When disposable-income inequality is measured across 20–35 years of survey data, the consistent result is that the U.S. has the highest level of disposable-income inequality among rich countries. Some countries have experienced periods of falling, as well as rising, inequality over the last three decades. The simple, but important, conclusion to draw is that rising income inequality is not inevitable. Policy and markets can both make a difference.

Neighborhood Income Composition by Race and Income, 1990-2009 Sean F. Reardon, Joseph Townsend, Lindsay Fox

Neighborhood Income Composition by Race and Income, 1990-2009

Author: Sean F. Reardon, Joseph Townsend, Lindsay Fox
Publisher:
Date: 07/2015

Residential segregation, by definition, leads to racial and socioeconomic disparities in neighborhood conditions. These disparities may in turn produce inequality in social and economic opportunities and outcomes. Because racial and socioeconomic segregation are not independent of one another, however, any analysis of their causes, patterns, and effects must rest on an understanding of the joint distribution of race/ethnicity and income among neighborhoods. In this paper, we use a new technique to describe the average racial composition and income distributions in the neighborhoods of households of different income levels and race/ethnicity. Using data from the decennial censuses and the American Community Survey, we investigate how patterns of neighborhood context in the United States over the past two decades vary by household race/ethnicity, income, and metropolitan area. We find large and persistent racial differences in neighborhood context, even among households of the same annual income.

income and wealth - CPI Affiliates

Victor Nee's picture Victor Nee Frank and Rosa Rhodes Professor of Sociology; Director of the Center for the Study of Economy and Society
Cornell University
Patricia A. Roos's picture Patricia A. Roos Professor of Sociology
Rutgers University-New Brunswick
John Allen Logan's picture John Allen Logan Professor of Sociology
University of Wisconsin - Madison
Walter Korpi's picture Walter Korpi Professor, Swedish Institute for Social Research
Stockholm University
Paul Beaudry Professor
University of British Columbia

Pages

Income And Wealth - Other Research

Title Author Media
Earnings Inequality and Mobility in the United States: Evidence from Social Security Data since 1937 Wojciech, Kopczuk, Emmanuel Saez and Jae Song

Earnings Inequality and Mobility in the United States: Evidence from Social Security Data since 1937

Author: Wojciech, Kopczuk, Emmanuel Saez and Jae Song
Publisher:
Date: 12/2010
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