Estimating Trends in US Income Inequality Using the Current Population Survey: The Importance of Controlling for Censoring

Richard V. Burkhauser (), Shuaizhang Feng (), Stephen Jenkins () and Jeff Larrimore ()
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Shuaizhang Feng: Princeton University

No 3690, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: Using internal and public use March Current Population Survey data, we analyze trends in US income inequality (1975–2004). Using a multiple imputation approach where values for censored observations are imputed using draws from a Generalized Beta distribution of the Second Kind, we find that the upward trend in income inequality significantly slowed after 1993. Our results closely match the income share trends reported by Piketty and Saez (2003) except for within the top 1 percent of the distribution. Thus, we argue that if inequality has increased substantially since 1993, such increases are confined to this very high income group.

Keywords: US income inequality; time trend; CPS; censoring; topcoding; inequality (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-ltv
Date: 2008-09
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Related works:
Working Paper: Estimating Trends in US Income Inequality Using the Current Population Survey: The Importance of Controlling for Censoring (2008)
Working Paper: Estimating Trends in U.S. Income Inequality Using the Current Population Survey: The Importance of Controlling for Censoring (2008)
Working Paper: Estimating Trends in US Income Inequality Using the Current Population Survey: The Importance of Controlling for Censoring (2008)
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