Top Incomes, Rising Inequality, and Welfare
AbstractThis paper develops a general-equilibrium production model of skill-biased technological change that approximates the dramatic upward shift in the share of total income going to the top decile of U.S. households since 1980. Under realistic assumptions, we show that all agents in the economy can benefit from the technology change, provided that the observed rise in U.S. redistributive transfers over this period is taken into account. We show that the increase in capital?'s share of total income and the presence of capital-entrepreneurial skill complementarity are two key features that help support the wages of ordinary workers as the new technology diffuses.
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Bibliographic InfoPaper provided by Centre for Dynamic Macroeconomic Analysis in its series CDMA Working Paper Series with number 201304.
Date of creation: 01 Jul 2013
Date of revision:
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More information through EDIRC
Income Inequality; Skill-biased Technological Change; Capital-skill Complementarity; Redistribution; Welfare;
Other versions of this item:
- Kevin J. Lansing & Agnieszka Markiewicz, 2012. "Top incomes, rising inequality, and welfare," Working Paper 2012/10, Norges Bank.
- Kevin J. Lansing & Agnieszka Markiewicz, 2012. "Top Incomes, Rising Inequality, and Welfare," Tinbergen Institute Discussion Papers 12-114/IV, Tinbergen Institute.
- Kevin Lansing & Agnieszka Markiewicz, 2012. "Top incomes, rising inequality, and welfare," Working Paper Series 2012-23, Federal Reserve Bank of San Francisco.
- Kevin J. Lansing & Agnieszka Markiewicz, 2012. "Top Incomes, Rising Inequality, and Welfare," CESifo Working Paper Series 3984, CESifo Group Munich.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-06 (All new papers)
- NEP-DGE-2013-09-06 (Dynamic General Equilibrium)
- NEP-LTV-2013-09-06 (Unemployment, Inequality & Poverty)
- NEP-PBE-2013-09-06 (Public Economics)
You can help add them by filling out this form.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Top Incomes, Rising Inequality, and Welfare
by Christian Zimmermann in NEP-DGE blog on 2013-09-11 12:02:58
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