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Income Inequality in the 1990s: Re-Forging a Lost Relationship?

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Author Info

  • Richard V. Burkhauser

    (Department of Policy Analysis and Management, Cornell University)

  • Kenneth A. Couch

    (Department of Economics, University of Connecticut)

  • Andrew Houtenville

    (School of Industrial and Labor Relations, Cornell University)

  • Ludmila Rovba

    (Department of Econonomics, Cornell University)

Abstract

Using data from March Current Population Surveys we find gains from economic growth over the 1990s business cycle (1989-2000) were more equitably distributed than over the 1980s business cycle (1979-1989) using summary inequality measures as well as kernel density estimations. The entire distribution of household size-adjusted income moved upwards in the 1990s with profound improvements for African Americans, single mothers and those living in households receiving welfare. Most gains occurred over the growth period 1993-2000. Improvements in average income and income inequity over the latter period are reminiscent of gains seen in the first three decades after World War II.

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Bibliographic Info

Paper provided by University of Connecticut, Department of Economics in its series Working papers with number 2004-11.

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Length: 44 pages
Date of creation: Jun 2004
Date of revision:
Handle: RePEc:uct:uconnp:2004-11

Note: We thank J.S. Butler and Mary C. Daly for their comments on earlier versions of this paper.
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Keywords: income inequality; Gini trends; kernel density estimations; economic well-being;

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References

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  1. Jäntti, Markus & Jenkins, Stephen P., 2013. "Income Mobility," IZA Discussion Papers 7730, Institute for the Study of Labor (IZA).
  2. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," Journal of Economic Literature, American Economic Association, vol. 40(4), pages 1105-1166, December.
  3. Kenneth A. Couch & Mary C. Daly, 2004. "The Improving Relative Status of Black Men," Working papers 2004-12, University of Connecticut, Department of Economics.
  4. Lerman, Robert I, 1996. "The Impact of the Changing US Family Structure on Child Poverty and Income Inequality," Economica, London School of Economics and Political Science, vol. 63(250), pages S119-39, Suppl..
  5. Danziger, Sheldon & Gottschalk, Peter, 1987. "Earnings Inequality, the Spatial Concentration of Poverty, and the Underclass," American Economic Review, American Economic Association, vol. 77(2), pages 211-15, May.
  6. Dooley, Martin D & Gottschalk, Peter, 1984. "Earnings Inequality among Males in the United States: Trends and the Effect of Labor Force Growth," Journal of Political Economy, University of Chicago Press, vol. 92(1), pages 59-89, February.
  7. Simon C. Parker, 1999. "Income Inequality and the Business Cycle: A Survey of the Evidence and Some New Results," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 21(2), pages 201-225, January.
  8. Maria Cancian & Deborah Reed, 1999. "The impact of wives’ earnings on income inequality: Issues and estimates," Demography, Springer, vol. 36(2), pages 173-184, May.
  9. Burkhauser, Richard V. & Butler, J. S. & Feng, Shuaizhang & Houtenville, Andrew J., 2004. "Long term trends in earnings inequality: what the CPS can tell us," Economics Letters, Elsevier, vol. 82(2), pages 295-299, February.
  10. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
  11. Kenneth Couch & Mary Daly, 2004. "The improving relative status of black men," Working Paper Series 2004-02, Federal Reserve Bank of San Francisco.
  12. Katharine Bradbury, 1996. "Growing inequality of family incomes: changing families and changing wages," New England Economic Review, Federal Reserve Bank of Boston, issue Jul, pages 55-82.
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Cited by:
  1. Richard Burkhauser & Takashi Oshio & Ludmila Rovba, 2006. "How the Distribution of After-Tax Income Changed Over the 1990s Business Cycle: A Comparison of the United States, Great Britain, Germany and Japan," Working Papers wp145, University of Michigan, Michigan Retirement Research Center.
  2. Richard V. Burkhauser & Shuaizhang Feng & Stephen P. Jenkins, 2009. "Using The P90-P10 Index To Measure U.S. Inequality Trends With Current Population Survey Data: A View From Inside The Census Bureau Vaults," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(1), pages 166-185, 03.
  3. Richard Burkhauser & Shuaizhang Feng & Stephen Jenkins & Jeff Larrimore, 2011. "Estimating trends in US income inequality using the Current Population Survey: the importance of controlling for censoring," Journal of Economic Inequality, Springer, vol. 9(3), pages 393-415, September.
  4. Maximo Camacho & Aida Galiano, 2009. "Income distribution changes across the 1990s expansion: the role of taxes and transfers," Economics Bulletin, AccessEcon, vol. 29(4), pages 3177-3185.
  5. Richard V. Burkhauser & Mary C. Daly & Jeff Larrimore & Joyce Kwok, 2008. "The Transformation in Who is Expected to Work in the United States and How it Changed the Lives of Single Mothers and People with Disabilities," Working Papers wp187, University of Michigan, Michigan Retirement Research Center.

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