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Using the P90/P10 index to measure US inquality trends with current population survey data: a view from inside the Census Bureau vaults

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  • Burkhauser, Richard V.
  • Feng, Shuaizhang
  • Jenkins, Stephen P.

Abstract

The March Current Population Survey (CPS) is the primary data source for estimation of levels and trends in labor earnings and income inequality in the USA. Time-inconsistency problems related to top coding in theses data have led many researchers to use the ratio of the 90th and 10th percentiles of these distributions (P90/P10) rather than a more traditional summary measure of inequality. With access to public use and restricted-access internal CPS data, and bounding methods, we show that using P90/P10 does not completely obviate time-inconsistency problems, especially for household income inequality trends. Using internal data, we create consistent cell mean values for all top-coded public use values that, when used with public use data, closely track inequality trends in labor earnings and household income using internal data. But estimates of longer-term inequality trends with these corrected data based on P90/P10 differ from those based on the Gini coefficient. The choice of inequality measure matters.

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Bibliographic Info

Paper provided by Institute for Social and Economic Research in its series ISER Working Paper Series with number 2007-14.

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Date of creation: 02 Jun 2007
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Publication status: published
Handle: RePEc:ese:iserwp:2007-14

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