The Spillover Effects of Top Income Inequality

Joshua Gottlieb, David Hemous, Jeffrey Hicks and Morten Olsen

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: Top income inequality in the United States has increased considerably within occupations. This phenomenon has led to a search for a common explanation. We instead develop a theory where increases in income inequality originating within a few occupations can “spill over” through consumption into others. We show theoretically that such spillovers occur when an occupation provides non divisible services to consumers, with physicians our prime example. Examining local income inequality across U.S. regions, the data suggest that such spillovers exist for physicians, dentists, and real estate agents. Estimated spillovers for other occupations are consistent with the predictions of our theory.

Keywords: Income inequality; Assignment model; Occupational inequality; Superstars (search for similar items in EconPapers)
JEL-codes: D31 J24 J31 O15 (search for similar items in EconPapers)
Pages: 72 pages
Date: 2023-06
New Economics Papers: this item is included in nep-lma and nep-ure
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Citations: View citations in EconPapers (1)

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https://www2.census.gov/library/working-papers/2023/adrm/ces/CES-WP-23-29.pdf First version, 2023 (application/pdf)

Related works:
Working Paper: The Spillover Effects of Top Income Inequality (2023)
Working Paper: The Spillover Effects of Top Income Inequality (2023)
Working Paper: The Spill-over Effects of Top Income Inequality (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:23-29

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