Wage increases, transfers, and the socially determined income distribution in the USA

Lance Taylor, Armon Rezai, Rishabh Kumar, Nelson Barbosa-Filho and Laura Barbosa de Carvalho

Review of Keynesian Economics, 2017, vol. 5, issue 2, 259-275

Abstract: This paper is based on a social accounting matrix (SAM) which incorporates the size distribution of income based on data from the BEA national accounts, the widely discussed 2012 CBO distribution study, and BLS consumer surveys. Sources and uses of incomes are disaggregated by household groups including the top 1 percent. Their importance (including saving rates) differs markedly across households. The SAM reveals two transfer flows exceeding 10 percent of GDP via fiscal (broadly progressive) and financial (regressive) channels. A third major flow over time has been a ten percentage point increase in the GDP share of the top 1 percent. A simulation model is used to illustrate how 'feasible' modifications to tax/transfer programs and increasing low wages cannot offset the historical redistribution toward the well-to-do.

Keywords: wealth distribution; income distribution; SAM (search for similar items in EconPapers)
JEL-codes: B50 D31 D33 D58 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:elg:rokejn:v:5:y:2017:i:2:p259-275

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