In Search of the Roots of American Inequality Exceptionalism: An Analysis Based on Luxembourg Income Study (LIS) Data

Janet Gornick, Branko Milanovic and Nathaniel Johnson ()

No 692, LIS Working papers from LIS Cross-National Data Center in Luxembourg

Abstract: Earlier work has established that the US has exceptionally high inequality of disposable household income (i.e., income after accounting for taxes and transfers). There is a debate whether it is due to an unusually high inequality of market (pre‐tax‐pre‐transfer) income or to weak redistribution. In this paper, we look more deeply at market income inequality, focusing on its main component – labor income – across a group of 24 OECD countries. We disaggregate the working‐age population into household types, defined by the number and gender of the household’s earners and the partnership and parenting status of its members. We conclude that within‐group inequality of labor incomes in the US is, in almost all groups, high by OECD standards. The roots of US inequality exceptionalism are not to be found in an unusual demographic composition, nor in unusually high or low mean incomes of some demographic groups, but in pervasive high inequality within each of these groups.

Keywords: Wage distribution; earnings distributions; income inequality (search for similar items in EconPapers)
JEL-codes: D31 D33 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2021-03
New Economics Papers: this item is included in nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Forthcoming in Measuring and Understanding the Distribution and Intra/Inter-Generational Mobility of Income and Wealth, edited by Raj Chetty, John Friedman, Janet Gornick, Barry Johnson, Arthur Kennickell, University of Chicago Press. NBER Series.

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Related works:
Chapter: In Search of the Roots of American Inequality Exceptionalism: An Analysis Based on Luxembourg Income Study (LIS) Data (2021)
Working Paper: In Search of the Roots of American Inequality Exceptionalism: An Analysis Based on Luxembourg Income Study (LIS) Data (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:lis:liswps:692

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