More Unequal We Stand? Inequality Dynamics in the United States 1967–2021
Jonathan Heathcote,
Fabrizio Perri,
Giovanni Violante and
Lichen Zhang
No 31486, NBER Working Papers from National Bureau of Economic Research, Inc
Abstract:
Heathcote et al. (2010) conducted an empirical analysis of several dimensions of inequality in the United States over the years 1967-2006, using publicly-available survey data. This paper expands the analysis, and extends it to 2021. We find that since the early 2000s, the college wage premium has stopped growing, and the race wage gap has stalled. However, the gender wage gap has kept shrinking. Both individual- and household-level income inequality have continued to rise at the top, while the cyclical component of inequality dominates dynamics below the median. Inequality in consumption expenditures has remained remarkably stable over time. Income pooling within the family and redistribution by the government have enormous impacts on the dynamics of household-level inequality, with the role of the family diminishing and that of the government growing over time. In particular, largely due to generous government transfers, the COVID recession has been the first downturn in fifty years in which inequality in disposable income and consumption actually declined.
JEL-codes: D12 D31 E21 H53 J31 (search for similar items in EconPapers)
Date: 2023-07
New Economics Papers: this item is included in nep-dem and nep-lma
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Published as Jonathan Heathcote & Fabrizio Perri & Giovanni L. Violante & Lichen Zhang, 2023. "More Unequal We Stand? Inequality Dynamics in the United States, 1967–2021," Review of Economic Dynamics, .
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Working Paper: More Unequal We Stand? Inequality Dynamics in the United States 1967-2021 (2023)
Working Paper: More Unequal We Stand? Inequality Dynamics in the United States, 1967–2021 (2023)
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