Recent trends in top income shares in the USA: reconciling estimates from March CPS and IRS tax return data

Burkhauser, Richard V., Feng, Shuaizhang, Jenkins, Stephen P. and Larrimore, Jeff (2012) Recent trends in top income shares in the USA: reconciling estimates from March CPS and IRS tax return data. Review of Economics and Statistics, 94 (2). pp. 371-388. ISSN 0034-6535

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Abstract

Although most US income inequality research is based on public-use March CPS data, a new wave of research using IRS tax-return data reports substantially faster inequality growth for recent years. We show that these apparently inconsistent estimates are largely reconciled when the income distribution and inequality are defined the same way. Using internal CPS data for 1967–2006, we show that CPS-based estimates of top income shares are similar to IRS data-based estimates reported by Piketty and Saez (2003). Our results imply that income inequality changes since 1993 are largely driven by changes in incomes of the top 1 percent.

Item Type:	Article
Official URL:	http://www.mitpressjournals.org/loi/rest
Additional Information:	© 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology
Library of Congress subject classification:	H Social Sciences > HB Economic Theory
Journal of Economic Literature Classification System:	C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology; Computer Programs > C81 - Methodology for Collecting, Estimating, and Organizing Microeconomic Data D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions
Sets:	Departments > Social Policy Collections > Economists Online Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Funders:	National Science Foundation, National Institute for Disability and Rehabilitation Research, University of Essex, UK Economic and Social Research Council for the Research Centre on Micro- Social Change, United Kingdom Longitudinal Studies Centre
Date Deposited:	19 Jan 2012 11:55
URL:	http://eprints.lse.ac.uk/41587/

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