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Income Inequality in the United States, 1913-1998 (series updated to 2000 available)

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  • Thomas Piketty
  • Emmanuel Saez

Abstract

This paper presents new homogeneous series on top shares of income and wages from 1913 to 1998 in the US using individual tax returns data. Top income and wages shares display a U-shaped pattern over the century. Our series suggest that the 'technical change' view of inequality dynamics cannot fully account for the observed facts. The large shocks that capital owners experienced during the Great Depression and World War II seem to have had a permanent effect: top capital incomes are still lower in the late 1990s than before World War I. A plausible explanation is that steep progressive taxation, by reducing drastically the rate of wealth accumulation at the top of the distribution, has prevented large fortunes to recover fully yet from these shocks. The evidence on wage inequality shows that top wage shares were flat before WWII and dropped precipitously during the war. Top wage shares have started recovering from this shock since the 1960s-1970s and are now higher than before WWII. We emphasize the role of social norms as a potential explanation for the pattern of wage shares. All the tables and figures have been updated to the year 2000, the are available in excel format in the data appendix of the paper.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8467.

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Date of creation: Sep 2001
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Publication status: published as Piketty, Thomas and Emmanuel Saez. "Income Inequality In The United States, 1913-1998," Quarterly Journal of Economics, 2003, v118(1,Feb), 1-39.
Handle: RePEc:nbr:nberwo:8467

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Desigualdad de ingresos: su evolución en 100 años de historia
    by Kiko Llaneras in Politikon on 2012-05-15 06:50:18
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Cited by:
  1. Robert Shelburne, 2006. "A Utilitarian Welfare Analysis of Trade Liberalization," ECE Discussion Papers Series 2006_4, UNECE.
  2. Oliver Grant, 2002. "Does Industrialisation Push up Inequality? New Evidence on the Kuznets Curve from Nineteenth-Century Prussian Tax Statistics," Economics Series Working Papers 2002-W48, University of Oxford, Department of Economics.

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