Extreme Wage Inequality: Pay at the Very Top

By Brian D. Bell and John Van Reenen

American Economic Review, May 2013

We provide new evidence on the growth in pay at the very top of the wage distribution in the United Kingdom. Sectoral decompositions show that workers in the financial sector have accounted for the majority of the gains at the top over the last decade. Ne...

Income Inequality, Mobility, and Turnover at the Top in the US, 1987-2010

By Gerald Auten, Geoffrey Gee, and Nicholas Turner

American Economic Review, May 2013

While cross-sectional data show increasing income inequality in the United States, it is also important to examine how incomes change over time. Using income tax data, this paper provides new evidence on long-term and intergenerational mobility, and persi...

Deconstructing Income and Income Inequality Measures: A Crosswalk from Market Income to Comprehensive Income

By Philip Armour, Richard V. Burkhauser, and Jeff Larrimore

American Economic Review, May 2013

Recent research on levels and trends in the United States in income inequality vary substantially in how they measure income. We show the sensitivity of alternative income measures in capturing income trends using a unified data set. Focusing solely on ma...

Consumption and Income Inequality and the Great Recession

By Bruce D. Meyer and James X. Sullivan

American Economic Review, May 2013

We examine changes in consumption and income inequality between 2000 and 2011. During the most recent recession, unemployment rose and asset values declined sharply. We investigate how the recession affected inequality while addressing concerns about unde...

Measuring the Trends in Inequality of Individuals and Families: Income and Consumption

By Jonathan D. Fisher, David S. Johnson, and Timothy M. Smeeding

American Economic Review, May 2013

We present evidence on the level of and trend in inequality from 1985-2010 in the United States, using disposable income and consumption for a sample of individuals from the Consumer Expenditure (CE) Survey. Differing from the findings in other recent res...

The Geography of Trade and Technology Shocks in the United States

By David H. Autor, David Dorn, and Gordon H. Hanson

American Economic Review, May 2013

This paper explores the geographic overlap of trade and technology shocks across local labor markets in the United States. Regional exposure to technological change, as measured by specialization in routine task-intensive production and clerical occupatio...

Achieving Escape Velocity: Neighborhood and School Interventions to Reduce Persistent Inequality

By Roland G. Fryer Jr. and Lawrence F. Katz

American Economic Review, May 2013

This paper reviews the evidence on the efficacy of neighborhood and school interventions in improving the long-run outcomes of children growing up in poor families. We focus on studies exploiting exogenous sources of variation in neighborhoods and schools...

Beyond Work Ethic: Religion, Individual, and Political Preferences

By Christoph Basten and Frank Betz

American Economic Journal: Economic Policy, August 2013

We investigate the effect of Reformed Protestantism, relative to Catholicism, on preferences for leisure, and for redistribution and intervention in the economy. We use a Fuzzy Spatial Regression Discontinuity Design to exploit a historical quasi-experime...

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 ...