The March Current Population Survey (CPS) public-use files have been the primary data source used to study income inequality trends in the USA. The consensus finding of research based on these data is that household income inequality increased substantially in the 1970s and 1980s, and continued to increase but at a much slower pace starting in the 1990s (Gottschalk and Danziger 2005, Daly and Valetta 2006, and Burkhauser, Feng, and Jenkins 2009).
The most notable alternative source for studying income inequality trends in the USA derives from tax return data. In their seminal paper, Piketty and Saez (2003) use data from Internal Revenue Service (IRS) Statistics of Income tax returns to analyze income inequality trends in the USA. Their paper …show more content…
However, their findings have also sparked debate about US inequality trends in recent years. For a flavor of the debate on this topic, see the blog postings by leading economists and others on the Economists View website (2007). Reynolds (2007) provides an illustration of how the work by Piketty and Saez has altered the popular view of recent trends in income inequality and a critique of their results.
In contrast to research based on CPS data that finds income inequality slowing in the 1990s, Piketty and Saez (2003, 2008) find that the share of total income (excluding capital gains) held by the very richest groups grew during the 1990s and, with the exception of the period from 2000–2002, continued to rise rapidly through the beginning of the 21st century as well. (When capital gains are included in the income measure, Piketty and Saez find that top income shares grew even faster.) What explains the differences in inequality trends found by researchers using these two types of
The most notable alternative source for studying income inequality trends in the USA derives from tax return data. In their seminal paper, Piketty and Saez (2003) use data from Internal Revenue Service (IRS) Statistics of Income tax returns to analyze income inequality trends in the USA. Their paper …show more content…
However, their findings have also sparked debate about US inequality trends in recent years. For a flavor of the debate on this topic, see the blog postings by leading economists and others on the Economists View website (2007). Reynolds (2007) provides an illustration of how the work by Piketty and Saez has altered the popular view of recent trends in income inequality and a critique of their results.
In contrast to research based on CPS data that finds income inequality slowing in the 1990s, Piketty and Saez (2003, 2008) find that the share of total income (excluding capital gains) held by the very richest groups grew during the 1990s and, with the exception of the period from 2000–2002, continued to rise rapidly through the beginning of the 21st century as well. (When capital gains are included in the income measure, Piketty and Saez find that top income shares grew even faster.) What explains the differences in inequality trends found by researchers using these two types of