Income and Wealth Inequality in America, 1949-2013
AbstractRelying on newly coded data from historical waves of the Survey of Consumer Finances
(SCF) going back to 1949, this paper studies the distribution of U.S. household income
and wealth over seven decades of U.S. postwar history. The new micro-level data allow
us to address central questions about the evolution of income and wealth inequality
that have been beyond reach with existing data and methods. We provide new evidence
for the evolution of income and wealth inequality among the bottom 90% of
households. We document how increasing income and wealth concentration at the top
was accompanied by a hollowing out of the middle class. The historical household surveys
also make it possible to study trends in income and wealth concentration jointly.
We show that income inequality rose earlier and more strongly than wealth inequality.
Differences in household portfolios and leverage play the central role for the observed
divergence of income and wealth inequality.