Work

Recent Trends in Top Income Shares in the United States: Reconciling Estimates from March CPS and IRS Tax Return Data

Year: 2011

Type: article

Abstract: Although most U.S. income inequality research is based on public use March CPS data, a new wave of research using IRS tax return data reports substantially faster inequality growth for recent years. We show that these apparently inconsistent estimates are largely reconciled when the income distribution and inequality are defined the same way. Using internal CPS data for 1967 to 2006, we show that CPS-based estimates of top income shares are similar to IRS data-based estimates reported by Piketty and Saez (2003). Our results imply that income inequality changes since 1993 are largely driven by changes in incomes of the top 1%.

Source: The Review of Economics and Statistics

DOI: 10.1162/rest_a_00200

Authors: Richard V. Burkhauser, Shuaizhang Feng, Stephen P. Jenkins, Jeff Larrimore

Institutions: The University of Melbourne, Cornell University, Shanghai University of Finance and Economics, University of Essex

Language: English

Topic: Income, Poverty, and Inequality

Subfield: Sociology and Political Science

Field: Social Sciences

Domain: Social Sciences

SDG: Reduced inequalities

Open Access status: bronze

Funders: National Science Foundation, University of Essex, Economic and Social Research Council