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A look at long-term developments in the distribution of income

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  • Joseph H. Haslag
  • Lori L. Taylor

Abstract

Developments in the distribution of income have received much attention over the past decade. Several analysts have argued that income gains have gone almost exclusively to the highest paid 20 percent of the population, leaving no gains to the remaining 80 percent. ; Joseph H. Haslag and Lori L. Taylor examine developments in income inequality over the past forty years and estimate which factors account for these changes over time. While some researchers have found that income distribution became more equal during the 1950s and 1960s and then less equal after the mid-1970s, Haslag and Taylor find evidence that an upward trend in income inequality has been occurring since the early 1950s. They also find that movements in the income inequality measure are mostly determined by persistence; that is, income inequality adjusts gradually. Demographic features account for nearly 25 percent of the variation in income inequality, while policy actions explain less than 15 percent.

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File URL: http://www.dallasfed.org/assets/documents/research/er/1993/er9301b.pdf
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Bibliographic Info

Article provided by Federal Reserve Bank of Dallas in its journal Economic and Financial Policy Review.

Volume (Year): (1993)
Issue (Month): Jan ()
Pages: 19-30

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Handle: RePEc:fip:fedder:y:1993:i:jan:p:19-30

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Keywords: Income distribution;

References

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  1. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
  2. Blinder, Alan S & Esaki, Howard Y, 1978. "Macroeconomic Activity and Income Distribution in the Postwar United States," The Review of Economics and Statistics, MIT Press, vol. 60(4), pages 604-09, November.
  3. Keith R. Phillips, 1992. "Regional wage divergence and national wage inequality," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q IV, pages 31-44.
  4. Joel Slemrod, 1992. "Taxation and Inequality: A Time-Exposure Perspective," NBER Working Papers 3999, National Bureau of Economic Research, Inc.
  5. Stiglitz, Joseph E, 1969. "Distribution of Income and Wealth among Individuals," Econometrica, Econometric Society, vol. 37(3), pages 382-97, July.
  6. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-25, April.
  7. Danziger, Sheldon & Haveman, Robert & Plotnick, Robert, 1981. "How Income Transfer Programs Affect Work, Savings, and the Income Distribution: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 19(3), pages 975-1028, September.
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Cited by:
  1. Florence Bouvet, 2010. "EMU and the dynamics of regional per capita income inequality in Europe," Journal of Economic Inequality, Springer, vol. 8(3), pages 323-344, September.

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