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Do transfers lower inequality between households? Demographic evidence from Distributional National Accounts

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  • Marina Gindelsky

Abstract

Using the Distribution of Personal Income constructed by the Bureau of Economic Analysis for U.S. households (2007–2018), I use a National Accounts framework to show that transfers significantly lower inequality between households by redistributing income from non‐elderly households to elderly households. Social security and Medicare are the most significant transfers, responsible for two third of the overall inequality reduction, substantially more than income‐based transfers for most households. Transfers do not significantly reduce inequality between racial groups overall. As the population ages, transfers have increased as a share of income for all races; yet, inequality persists at a high level.

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  • Marina Gindelsky, 2022. "Do transfers lower inequality between households? Demographic evidence from Distributional National Accounts," Economic Inquiry, Western Economic Association International, vol. 60(3), pages 1233-1257, July.
    • Handle: RePEc:bla:ecinqu:v:60:y:2022:i:3:p:1233-1257
    DOI: 10.1111/ecin.13061
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    Cited by:

    1. Lukas Riedel & Holger Stichnoth, 2024. "Government consumption in the DINA framework: allocation methods and consequences for post-tax income inequality," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(3), pages 736-779, June.
    2. Roth, Steve, 2022. "Distributional Haig-Simons Income Accounts for U.S. Households, 2000-2019," MPRA Paper 114524, University Library of Munich, Germany.
    3. Roth, Steve & Bezemer, Dirk, 2024. "Introducing the THIAs: Total Haig-Simons U.S. Household Income Accounts, 1960–2021," MPRA Paper 121242, University Library of Munich, Germany.

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