Using the P90/P10 Index to Measure US Inequality Trends with Current Population Survey Data: A View from Inside the Census Bureau Vaults

Richard Burkhauser, Shuaizhang Feng and Stephen Jenkins

No 2839, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The March Current Population Survey (CPS) is the primary data source for estimation of levels and trends in labor earnings and income inequality in the USA. Time-inconsistency problems related to top coding in theses data have led many researchers to use the ratio of the 90th and 10th percentiles of these distributions (P90/P10) rather than a more traditional summary measure of inequality. With access to public use and restricted-access internal CPS data, and bounding methods, we show that using P90/P10 does not completely obviate time-inconsistency problems, especially for household income inequality trends. Using internal data, we create consistent cell mean values for all top-coded public use values that, when used with public use data, closely track inequality trends in labor earnings and household income using internal data. But estimates of longer-term inequality trends with these corrected data based on P90/P10 differ from those based on the Gini coefficient. The choice of inequality measure matters.

Keywords: Current Population Survey; income; decile ratio; Gini coefficient; earnings; inequality (search for similar items in EconPapers)
JEL-codes: C8 D3 J3 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2007-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Published - published in: Review of Income and Wealth, 2009, 55 (1), 166–185

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https://docs.iza.org/dp2839.pdf (application/pdf)

Related works:
Journal Article: USING THE P90/P10 INDEX TO MEASURE U.S. INEQUALITY TRENDS WITH CURRENT POPULATION SURVEY DATA: A VIEW FROM INSIDE THE CENSUS BUREAU VAULTS (2009)
Working Paper: Using the P90/P10 Index to Measure U.S. Inequality Trends with Current Population Survey Data: A View From Inside the Census Bureau Vaults (2007)
Working Paper: Using the P90/P10 Index to Measure US Inequality Trends with Current Population Survey Data: A View from Inside the Census Bureau Vaults (2007)
Working Paper: Using the P90/P10 index to measure US inquality trends with current population survey data: a view from inside the Census Bureau vaults (2007)
Working Paper: Using the P90/P10 Index to Measure US Inequality Trends with Current Population Survey Data: A View from Inside the Census Bureau Vaults* (2007)
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