How Elastic Are Preferences for Redistribution? Evidence from Randomized Survey Experiments

By Ilyana Kuziemko, Michael I. Norton, Emmanuel Saez, and Stefanie Stantcheva

American Economic Review, April 2015

We analyze randomized online survey experiments providing interactive, customized information on US income inequality, the link between top income tax rates and economic growth, and the estate tax. The treatment has large effects on views about inequality...

Preferences over Equality in the Presence of Costly Income Sorting

By Gilat Levy and Ronny Razin

American Economic Journal: Microeconomics, May 2015

We analyze preferences over redistribution in societies with costly (positive) sorting according to income. We identify a new motivation for redistribution, where individuals support taxation in order to reduce the incentives to sort. We characterize a si...

Capital Taxation in the Twenty-First Century

By Alan J. Auerbach and Kevin Hassett

American Economic Review, May 2015

In his influential book, Capital in the Twenty-First Century, Thomas Piketty argues forcefully that rising wealth and wealth inequality is an inherent characteristic of capitalist economies and calls for strong policy responses, in particular a s...

About Capital in the Twenty-First Century

By Thomas Piketty

American Economic Review, May 2015

In this article, I present three key facts about income and wealth inequality in the long run emerging from my book, Capital in the Twenty-First Century, and seek to sharpen and refocus the discussion about those trends. In particular, I clarify ...

Heterogeneity in the Impact of Economic Cycles and the Great Recession: Effects within and across the Income Distribution

By Marianne Bitler and Hilary Hoynes

American Economic Review, May 2015

In this paper, we examine the effects of economic cycles on low- to moderate-income families. We use variation across states and over time to estimate the effects of cycles on the distribution of income, using fine gradations of the household income-to-po...

Income Inequality, Capitalism, and Ethno-linguistic Fractionalization

By Jan-Egbert Sturm and Jakob De Haan

American Economic Review, May 2015

We examine the relationship between capitalism and income inequality for a large sample of countries using an adjusted economic freedom index as proxy for capitalism. Our results suggest that there is no robust relationship between economic freedom and Gi...

Has Consumption Inequality Mirrored Income Inequality?

By Mark Aguiar and Mark Bils

American Economic Review, September 2015

We revisit to what extent the increase in income inequality since 1980 was mirrored by consumption inequality. We do so by constructing an alternative measure of consumption expenditure using a demand system to correct for systematic measurement error in ...

Asset Pricing with Concentrated Ownership of Capital and Distribution Shocks

By Kevin J. Lansing

American Economic Journal: Macroeconomics, October 2015

This paper develops a production-based asset pricing model with two types of agents and concentrated ownership of physical capital. A temporary but persistent "distribution shock" causes the income share of capital owners to fluctuate in a procyclical man...

Technical Change, Wage Inequality, and Taxes

By Laurence Ales, Musab Kurnaz, and Christopher Sleet

American Economic Review, October 2015

This paper considers the normative implications of technical change for tax policy design. A task-to-talent assignment model of the labor market is embedded into an optimal tax problem. Technical change modifies equilibrium wage growth across talents and ...

Technology and the Changing Family: A Unified Model of Marriage, Divorce, Educational Attainment, and Married Female Labor-Force Participation

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

American Economic Journal: Macroeconomics, January 2016

Marriage has declined since 1960, with the drop being more significant for noncollege-educated individuals versus college-educated ones. Divorce has increased, more so for the noncollege-educated. Additionally, positive assortative mating has risen. Incom...

The Determinants and Welfare Implications of US Workers' Diverging Location Choices by Skill: 1980-2000

By Rebecca Diamond

American Economic Review, March 2016

From 1980 to 2000, the rise in the US college/high school graduate wage gap coincided with increased geographic sorting as college graduates concentrated in high wage, high rent cities. This paper estimates a structural spatial equilibrium model to det...

Consumption Inequality

[Symposium: Inequality Beyond Income]

By Orazio P. Attanasio and Luigi Pistaferri

Journal of Economic Perspectives, Spring 2016

In this essay, we discuss the importance of consumption inequality in the debate concerning the measurement of disparities in economic well-being. We summarize the advantages and disadvantages of using consumption as opposed to income for measuring trends...

Health Insurance and Income Inequality

[Symposium: Inequality Beyond Income]

By Robert Kaestner and Darren Lubotsky

Journal of Economic Perspectives, Spring 2016

Health insurance and other in-kind forms of compensation and government benefits are typically not included in measures of income and analyses of inequality. This omission is important. Given the large and growing cost of health care in the United States...

Cities Are Physical Too: Using Computer Vision to Measure the Quality and Impact of Urban Appearance

By Nikhil Naik, Ramesh Raskar, and César A. Hidalgo

American Economic Review, May 2016

For social scientists, developing an empirical connection between the physical appearance of a city and the behavior and health of its inhabitants has proved challenging due to a lack of data on urban appearance. Can we use computers to quantify urban app...

Russia's Billionaires

By Daniel Treisman

American Economic Review, May 2016

Using data collected by Forbes since the 1990s, I examine the emergence and survival of the super-wealthy in Russia over the past two decades and compare Russia's record to those of other countries. The major surge in the number of Russian billionaires ca...

The Role of Bequests in Shaping Wealth Inequality: Evidence from Danish Wealth Records

By Simon H. Boserup, Wojciech Kopczuk, and Claus T. Kreiner

American Economic Review, May 2016

Using Danish administrative data, we estimate the impact of bequests on the level and inequality of wealth. We compare the distributions of wealth over time of people whose parent died and those whose parent did not. Bequests account for 26 percent of the...

Estimating Top Income and Wealth Shares: Sensitivity to Data and Methods

By Jesse Bricker, Alice Henriques, Jacob Krimmel, and John Sabelhaus

American Economic Review, May 2016

Administrative income tax data indicate that U.S. top income and wealth shares are both substantial and larger than shares observed in household surveys. However, these estimates are sensitive to the unit of analysis, the income concept measured in tax re...

Estimating the Top Tail of the Wealth Distribution

By Philip Vermeulen

American Economic Review, May 2016

This paper uses the Household Finance and Consumption Survey to construct new estimates of top wealth shares in Germany, France, Spain, Italy, Belgium, Austria, Finland and The Netherlands. It provides a methodology to address simultaneously non-response ...

Heterogeneity in Returns to Wealth and the Measurement of Wealth Inequality

By Andreas Fagereng, Luigi Guiso, Davide Malacrino, and Luigi Pistaferri

American Economic Review, May 2016

Lacking a long time series on the assets of the very wealthy, Saez and Zucman (2015) use US tax records to obtain estimates of wealth holdings by capitalizing asset income from tax returns. They document marked upward trends in wealth concentration. We us...

Review Essay on British Economic Growth, 1270-1870 by Stephen Broadberry, Bruce M. S. Campbell, Alexander Klein, Mark Overton, and Bas van Leeuwen

By Jeffrey G. Williamson

Journal of Economic Literature, June 2016

British Economic Growth, 1270-1870 makes a big leap forward in our understanding of the long-run performance of what became the leading nineteenth-century economy and the workshop of the world. It does so by implementing a giant quantitative ente...