USA


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Sources and References

Sources:

Overall inequality: The Gini coefficient for gross equivalised household income is from the U.S. Bureau of the Census, Income, Poverty, and Health Insurance Coverage in the United States: 2015, (Table A-3, Selected measures of equivalence-adjusted income dispersion), where we have assumed that half of the recorded change between 1992 and 1993 was due to the change in methods (and therefore added 1.15 percentage points to the values from 1992 back to 1967;  post-2013 figures being adjusted downward using a forward proportional link at 2013 to deal with a change in methodology; the series is linked backwards at 1967 to the series from 1944 given by Budd (1970, Table 6, column 9) related to money income before tax for consumer units (families plus unrelated individuals); linked at 1944 to the BEA synthetic series for gross family incomes from Brandolini (2002, Table A1), who calculated the Gini coefficients from the original tabulations; and linked at 1929 to a series for gross income of income recipients based on the NBER/Brookings synthetic estimates, calculated from the tabulations in Mitchell et al (1921, Table 25) and Leven, Moulton and Warburton (1934, Tables 27 and 29, excluding capital gains).

Top income shares: Share of top 1 per cent in total gross income from the WID.world (tax units, excluding capital gains) are based on the work of Piketty and Saez (2003) and regularly updated by  Emmanuel Saez. See also Piketty, Saez and Zucman, 2016 for a comparison of results based on pre-tax national income split equally within couples (the sum of all pretax personal income flows accruing to the owners of the production factors, labor and capital, after taking into account the distribution of pension income but before any other tax or transfer).

Poverty measures: Series 1: the proportion of the population living in households with pre-tax cash income below the official poverty line from 1959 taken from the U.S. Bureau of the Census website, Historical Poverty Tables, Table 2 and (also presented in Table B1 from the U.S. Bureau of the Census, Income, Poverty, and Health Insurance Coverage in the United States: 2015); post-2013 figures being adjusted downward using a forward proportional link at 2013 to deal with a change in methodology; before 1959 data taken from Fisher (1986), marked with a break as no linking is used; Series 2: Proportion living in households with after-tax income below 50 per cent of the median from Meyer and Sullivan (2010, Appendix Table 7), updated by linking forward to the same series from OECD iLibrary (OECD Social Issues/Migration/Health Statistics, Income Distribution Database).

Individual earnings: The series is based on State of Working America Data Library (Economic Policy Institute, 2017, wages by percentile series) based on the Current Population Survey (CPS) Outgoing Rotation Group microdata, linked at 1973 to the estimates of Karoly (1992, Table 2B.2),linked at 1963 to the estimates of Atkinson (2008, Table T.10) from the CPS tabulations, linked at 1949 to the estimates of Goldin and Margo (1992, Table 2) based on Census of Population data.

Wealth inequality: Series 1: Share of top 1 per cent of individuals (equal-split adults) in total personal net wealth from WID.world based on the work of Saez and Zucman (2016) who capitalised total investment incomes of US tax units. Series 2: Share of top 1 per cent of households in total personal net wealth from the Survey of Consumer Finances back to 1989 and from early waves of the Survey of Consumer Finances (SCF) going back to 1949 assembled by Khun, Schularick and Steins (2017) into the harmonized historical Survey of Consumer Finances (HHSCF). For recent comparable estimates see also Kennickell (2009, Table 4, and 2011, Table 5) and Bricker et al. (2015). An alternative series based on the estate tax data is given in Kopczuk and Saez (2004, Table B1) and was updated from Saez and Zucman (2016, Online Appendix), Table C4.

References:

  • Atkinson, A B, 2008, The changing distribution of earnings in OECD countries, Oxford University Press, Oxford.
  • Brandolini, A, 2002, “A bird’s eye view of long-run changes in income inequality”, Bank of Italy Research Department, Rome.
  • Bricker, J, Henriques, A M,  Krimmel, J A.  and Sabelhaus, J E,  2015, “Measuring Income and Wealth at the Top Using Administrative and Survey Data,” Finance and Economics Discussion Series 2015-030. Washington: Board of Governors of the Federal Reserve System..
  • Budd, E C, 1970, “Postwar changes in the size distribution of income in the U.S.”, American Economic Review, Papers and Proceedings, vol 60: 247-260.
  • Economic Policy Institute, 2017, State of Working America Data Library, Series for wages by percentile.
  • Fisher, G, 1986, “Estimates of the poverty population under the current official definition for years before 1959”, mimeograph, Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services.
  • Goldin, C and Margo, R A, 1992, “The Great Compression: The wage structure of the United States at mid-century”, Quarterly Journal of Economics, vol 107: 1-34.
  • Goldsmith, S F, 1958, “The Relation of Census Income Distribution Statistics to Other Income Data”, in An Appraisal of the 1950 Census Income Data, Studies in Income and Wealth, vol 23: 65-107, Princeton, Princeton University Press.
  • Karoly, L, 1992, The trend in inequality among families, individuals, and workers in the United States: A twenty-five-year perspective, Rand, Santa Monica.
  • Kennickell, A B, 2009, “Ponds and streams: Wealth and income in the U.S., 1989 to 2007”, Finance and Economics Discussion Series, Federal Reserve Board, Washington, D.C.
  • Kennickell, A B, 2011, “Tossed and turned: Wealth dynamics of U.S. households 2007-2009”, Finance and Economics Discussion Series, Federal Reserve Board, Washington, D.C.
  • Kopczuk, W and Saez, E, 2004, “Top wealth shares in the US, 1916-2000: Evidence from the Estate Tax returns”, National Tax Journal, vol 57: 445-487, longer version in NBER Working Paper 10399.
  • Khun, M, Schularick, M, and Steins, U, 2017, Income and Wealth Inequality in America,1949-2013, mimeo
  • Leven, M, Moulton, H G and Warburton, C, 1934, America’s capacity to consume, Brookings Institution, Washington, D.C.
  • Meyer, B D and Sullivan, J X, 2010, “Five decades of consumption and income poverty”, Working Paper #09.07, The Harris School of Public Policy Studies the University Of Chicago.
  • Mitchell, W C, King, W I, Macaulay, F R and Knauth, O W, 1921, Income in the United States: Its amount and distribution 1909-1919, Harcourt, Brace, New York.
  • Piketty, T and Saez, E, 2003, “Income inequality in the United States, 1913-1998”, Quarterly Journal of Economics, vol 118: 1-39.
  • Piketty, T, Saez, E, and Zucman, G, 2016, “Distributional National Accounts: Methods and Estimates for the United States Data Appendix, WID.world WORKING,PAPER SERIES,N°,2016/4
  • Saez, E and Zucman, G, 2016, “Wealth inequality in the United States since 1913: Evidence from capitalized income tax data”, Quarterly Journal of Economics, vol 131: 519-578.