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

Richard Burkhauser, Shuaizhang Feng, Stephen Jenkins and Jeff Larrimore

No 4426, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Although the majority of research on US income inequality trends is based on public-use March CPS data, a new wave of research using IRS tax return data reports substantially higher levels of inequality and faster growing trends. We show that these apparently inconsistent estimates are largely reconciled if the inequality measure and the income distribution are defined in the same way. Using internal CPS data for 1967-2006, we closely match IRS data-based estimates of top income shares reported by Piketty and Saez (2003). Our results imply that any inequality increases since 1993 are concentrated among the top 1 percent of the distribution.

Keywords: IRS tax return data; US income inequality; top income shares; March CPS (search for similar items in EconPapers)
JEL-codes: C81 D31 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2009-09
New Economics Papers: this item is included in nep-acc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Published - revised version published in: Review of Economics and Statistics, 2012, 94 (2), 371–388

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Related works:
Working Paper: Recent trends in top income shares in the USA: reconciling estimates from March CPS and IRS tax return data (2012)
Working Paper: Recent Trends in Top Income Shares in the USA: Reconciling Estimates from March CPS and IRS Tax Return Data (2009)
Working Paper: Recent trends in top income shares in the USA: reconciling estimates from March CPS and IRS tax return data (2009)
Working Paper: Recent trends in top income shares in the USA: Reconciling estimates from March CPS and IRS tax return data (2009)
Working Paper: Recent Trends in Top Income Shares in the USA: Reconciling Estimates from March CPS and IRS Tax Return Data (2009)
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