Recent trends in top income shares in the USA: Reconciling estimates from March CPS and IRS tax return data

Richard Burkhauser, Shuaizhang Feng, Stephen P. Jenkins () and Jeff Larrimore
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Richard Burkhauser: Cornell University
Shuaizhang Feng: Princeton University and Shanghai University of Finance and Economics
Stephen P. Jenkins: University of Essex
Jeff Larrimore: Cornell University

No 139, Working Papers from ECINEQ, Society for the Study of Economic Inequality

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: US Income Inequality; Top income shares; March CPS; IRS tax return data. (search for similar items in EconPapers)
JEL-codes: D31 C81 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc and nep-ltv
Date: 2009
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Persistent link: http://EconPapers.repec.org/RePEc:inq:inqwps:ecineq2009-139

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