Time Use during the Great Recession

By Mark Aguiar, Erik Hurst, and Loukas Karabarbounis

American Economic Review, August 2013

Using data from the American Time Use Survey between 2003 and 2010, we document that home production absorbs roughly 30 percent of foregone market work hours at business cycle frequencies. Leisure absorbs roughly 50 percent of foregone market work ho...

The Top 1 Percent in International and Historical Perspective

[Symposium: The Top 1 Percent]

By Facundo Alvaredo, Anthony B. Atkinson, Thomas Piketty, and Emmanuel Saez

Journal of Economic Perspectives, Summer 2013

The top 1 percent income share has more than doubled in the United States over the last 30 years, drawing much public attention in recent years. While other English-speaking countries have also experienced sharp increases in the top 1 percent income sha...

Defending the One Percent

[Symposium: The Top 1 Percent]

By N. Gregory Mankiw

Journal of Economic Perspectives, Summer 2013

Imagine a society with perfect economic equality. Then, one day, this egalitarian utopia is disturbed by an entrepreneur with an idea for a new product. Think of the entrepreneur as Steve Jobs as he develops the iPod, J. K. Rowling as she writes her Har...

It's the Market: The Broad-Based Rise in the Return to Top Talent

[Symposium: The Top 1 Percent]

By Steven N. Kaplan and Joshua Rauh

Journal of Economic Perspectives, Summer 2013

One explanation that has been proposed for rising inequality is that technical change allows highly talented individuals, or "superstars" to manage or perform on a larger scale, applying their talent to greater pools of resources and reaching larger num...

The Pay of Corporate Executives and Financial Professionals as Evidence of Rents in Top 1 Percent Incomes

[Symposium: The Top 1 Percent]

By Josh Bivens and Lawrence Mishel

Journal of Economic Perspectives, Summer 2013

The debate over the extent and causes of rising inequality of American incomes and wages has now raged for at least two decades. In this paper, we will make four arguments. First, the increase in the incomes and wages of the top 1 percent over the last ...

Income Inequality, Equality of Opportunity, and Intergenerational Mobility

[Symposium: The Top 1 Percent]

By Miles Corak

Journal of Economic Perspectives, Summer 2013

My focus is on the degree to which increasing inequality in the high-income countries, particularly in the United States, is likely to limit economic mobility for the next generation of young adults. I discuss the underlying drivers of opportunity that ...

Why Hasn't Democracy Slowed Rising Inequality?

[Symposium: The Top 1 Percent]

By Adam Bonica, Nolan McCarty, Keith T. Poole, and Howard Rosenthal

Journal of Economic Perspectives, Summer 2013

During the past two generations, democratic forms have coexisted with massive increases in economic inequality in the United States and many other advanced democracies. Moreover, these new inequalities have primarily benefited the top 1 percent and even...

Correction: The Composition and Drawdown of Wealth in Retirement

By James Poterba, Steven Venti, and David Wise

Journal of Economic Perspectives, Fall 2013

Optimal Taxation of Top Labor Incomes: A Tale of Three Elasticities

By Thomas Piketty, Emmanuel Saez, and Stefanie Stantcheva

American Economic Journal: Economic Policy, February 2014

This paper derives optimal top tax rate formulas in a model where top earners respond to taxes through three channels: labor supply, tax avoidance, and compensation bargaining. The optimal top tax rate increases when there are zero-sum compensation-bar...

Heterogeneity and Aggregation: Implications for Labor-Market Fluctuations: Comment

By Shuhei Takahashi

American Economic Review, April 2014

Chang and Kim (2007) develop an incomplete asset markets model incorporating discrete labor supply and idiosyncratic labor productivity. Their results resolve long-standing puzzles for business cycle models. Specifically, they produce a low correlation...

Heterogeneity and Aggregation: Implications for Labor-Market Fluctuations: Reply

By Yongsung Chang and Sun-Bin Kim

American Economic Review, April 2014

Takahashi (2014) has uncovered coding errors in our paper, Chang and Kim (2007)-henceforth, CK. We acknowledge and are embarrassed by these mistakes. We are grateful to Takahashi for uncovering them. While the correction decreases the volatility of the...

Retirement Security in an Aging Population

By James M. Poterba

American Economic Review, May 2014

Elderly individuals exhibit wide disparities in their sources of income. For those in the bottom half of the income distribution, Social Security is the most important source of support; program changes would directly affect their well-being. Income from ...

The Distribution of Wealth and the MPC: Implications of New European Data

By Christopher D. Carroll, Jiri Slacalek, and Kiichi Tokuoka

American Economic Review, May 2014

Using a standard, realistically calibrated model of buffer-stock saving with transitory and permanent income shocks, we study how cross-country differences in the wealth distribution and household income dynamics affect the marginal propensity to consume ...

Consumption Inequality over the Last Half Century: Some Evidence Using the New PSID Consumption Measure

By Orazio Attanasio and Luigi Pistaferri

American Economic Review, May 2014

This paper contributes to the debate regarding trends in consumption inequality in the United States. We present a new measure of consumption inequality based on the redesigned 1999–2011 PSID. We impute consumption to the families observed before 19...

Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility

By Raj Chetty, Nathaniel Hendren, Patrick Kline, Emmanuel Saez, and Nicholas Turner

American Economic Review, May 2014

We present new evidence on trends in intergenerational mobility in the United States using administrative earnings records. We find that percentile rank-based measures of intergenerational mobility have remained extremely stable for the 1971–1993 bi...

Agricultural Productivity Differences across Countries

By Douglas Gollin, David Lagakos, and Michael E. Waugh

American Economic Review, May 2014

Recent studies argue that cross-country labor productivity differences are much larger in agriculture than in the aggregate. We reexamine the agricultural productivity data underlying this conclusion using new evidence from disaggregate sources. We find t...

Disparities in Wealth Accumulation and Loss from the Great Recession and Beyond

By Signe-Mary McKernan, Caroline Ratcliffe, Eugene Steuerle, and Sisi Zhang

American Economic Review, May 2014

Using over two decades of Survey of Consumer Finances data and a pseudo-panel technique, we measure the impact of the Great Recession on US family wealth relative to the counterfactual of what wealth would have been given wealth accumulation trajectories....

Marry Your Like: Assortative Mating and Income Inequality

By Jeremy Greenwood, Nezih Guner, Georgi Kocharkov, and Cezar Santos

American Economic Review, May 2014

Has there been an increase in positive assortative mating? Does assortative mating contribute to household income inequality? Data from the United States Census Bureau suggests there has been a rise in assortative mating. Additionally, assortative mating ...

Powering Up China: Income Distributions and Residential Electricity Consumption

By Maximilian Auffhammer and Catherine D. Wolfram

American Economic Review, May 2014

Current forecasts suggest that the vast majority of growth in energy demand will come from the developing world, and that China will play a major part in that growth. This paper presents evidence suggesting that the shape of the income distribution, which...

The Return of "Patrimonial Capitalism": A Review of Thomas Piketty's Capital in the Twenty-First Century

By Branko Milanovic

Journal of Economic Literature, June 2014

Capital in the Twenty-First Century by Thomas Piketty provides a unified theory of the functioning of the capitalist economy by linking theories of economic growth and functional and personal income distributions. It argues, based on the long-run h...