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

Burkhauser R (), Feng S, Stephen Jenkins () and Larrimore J
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Burkhauser R: Cornell University
Feng S: Shanghai University of Finance and Economics
Larrimore J: Cornell University

No 2009-27, ISER working papers from Institute for Social and Economic Research

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.

New Economics Papers: this item is included in nep-acc, nep-ltv and nep-pke
Date: 2009-09-14
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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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