Recent Trends in Top Income Shares in the USA: Reconciling Estimates from March CPS and IRS Tax Return Data

By Richard V. Burkhauser, Shuaizhang Feng, Stephen P. Jenkins, Jeff Larrimore. Social Science Research Network, 2009

129 citations recorded by the source corpus.

Although the majority of research on US income inequality trends is based on public-use March CPS data, a new wave of research using IRS tax return data reports substantially higher levels of inequality and faster growing trends. We show that these apparently inconsistent estimates are largely reconciled if the inequality measure and the income distribution are defined in the same way. Using internal CPS data for 1967-2006, we closely match IRS data-based estimates of top income shares reported by Piketty and Saez (2003). Our results imply that any inequality increases since 1993 are concentrated among the top 1 percent of the distribution.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/1da3cb86cf26994757ec9675a258cf4510661c31

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Citations in the corpus

The Global Distribution of Income (2014, methodology): “…U.S. Gini from 1976 to 2006 using survey data alone (corrected for a change in definition) was 0.053, which more than doubles to an increase of 0.108 using the top income data (including capital gains; Atkinson et al., 2011, p. 31; see Burkhauser et al., 2009 for further discussion of U.S. data).”
Long-Run Trends in the Distribution of Income and Wealth (2014, unknown): “Some recent studies recalculate the U.S. top income shares of Piketty and Saez (2003) using some of the largest U.S. household surveys: the Current Population Survey (CPS) (Burkhauser et al. 2012) and the Survey of Consumer Finances (SCF) (Wolff and Zacharias 2009, and Kennickell, 2009).”
Income Inequality and Income Segregation1 (2011, result): “By 2006, the share of income held by the top decile was 45% and the share held by the top 1% of earners was 18%, approaching inequality levels similar to the pre–World War II highs (Piketty and Saez 2003, 2008; Burkhauser et al. 2009).”
Decomposing Trends in Income Volatility: The 'Wild Ride' at the Top and Bottom (2014, methodology): “We obtained their cell codes and incorporated them into our data.6 Burkhauser et al. (2012) find that using the consistent top code method results in CPS measures of income inequality tracking those from proprietary tax return data better than (unadjusted) public-use CPS data, and Ziliak, Hardy,…”
Pareto Models, Top Incomes, and Recent Trends in UK Income Inequality (2017, unknown): “Burkhauser et al. (2016) create a complete time series for the period 1995/96–2010/11 (as for the SPI data) from FRS variables and show that their derived individual-level gross income variable is virtually identical to the DWP’s for the years for which they can make comparisons. I use Burkhauser et”
The widening academic achievement gap between the rich and the poor (2011, background): “income inequality was at its twentieth-century peak (Burkhauser et al. 2009; Piketty and Saez 2003, 2008).”