ENTREPRENEURSHIP AND INCOME DISTRIBUTION DYNAMICS: WHY IS THE INCOME SHARE OF TOP INCOME EARNERS ACYCLICAL OVER THE BUSINESS CYCLE?

Kwark, Noh-Sun; Ma, Eunseong

ENTREPRENEURSHIP AND INCOME DISTRIBUTION DYNAMICS: WHY IS THE INCOME SHARE OF TOP INCOME EARNERS ACYCLICAL OVER THE BUSINESS CYCLE?

International Economic Review, 2021, vol. 62, issue 1, 321-356

Abstract: In the United States, the income share of the top 5% income group is acyclical over the business cycle. This study attempts to explain the cyclical behavior of the income distribution over the business cycle, particularly focusing on the top 5% income earners' share, using a heterogeneous agent model featuring a choice to become an entrepreneur. The model economy successfully reproduces the acyclical behavior of the income share of the top 5%. During expansions, relatively more people become entrepreneurs at the top, which offsets the decline in the income share of the high‐income earners from workers' side.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1111/iere.12489

Related works:
Working Paper: Entrepreneurship and Income Distribution Dynamics: Why Is the Income Share of Top Income Earners Acyclical over the Business Cycle? (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:iecrev:v:62:y:2021:i:1:p:321-356

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0020-6598

Access Statistics for this article

International Economic Review is currently edited by Michael O'Riordan and Dirk Krueger

More articles in International Economic Review from Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297. Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().