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Testing the Significance of Income Distribution Changes over the 1980s Business Cycle: A Cross-National Comparison

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  • Burkhauser, Richard V.
  • Amy Crews Cutts
  • Mary C. Daly
  • Stephen P. Jenkins

Abstract

Using kernel density estimation we describe the distribution of household size-adjusted real income and how it changed over the business cycle of the 1980s in the United States and the United Kingdom. We confirm previous studies that show income inequality increased in the two countries and the middle of the distribution was squashed down. Using a series of statistical tests, however, we find that while the mass in both tails of the distribution increased significantly in both countries over the period, by far the greatest gains were in the upper tail.

Suggested Citation

  • Burkhauser, Richard V. & Amy Crews Cutts & Mary C. Daly & Stephen P. Jenkins, 1999. "Testing the Significance of Income Distribution Changes over the 1980s Business Cycle: A Cross-National Comparison," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(3), pages 253-272, May-June.
    • Handle: RePEc:jae:japmet:v:14:y:1999:i:3:p:253-72
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    Cited by:

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    3. Onji, Kazuki, 2009. "The response of firms to eligibility thresholds: Evidence from the Japanese value-added tax," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 766-775, June.
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    6. 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.
    7. Joanna Tyrowicz & Lucas Velde & Jan Svejnar, 2017. "Effects Of Labor Reallocation On Productivity And Inequality—Insights From Studies On Transition," Journal of Economic Surveys, Wiley Blackwell, vol. 31(3), pages 712-732, July.
    8. 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.
    9. Sami Remes, 2022. "Decomposition of the Shrinking Middle-class and Directional Mobility in Finland 1995–2012," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 162(3), pages 1281-1312, August.
    10. Walter Sosa-Escudero & Sergio Petralia, 2011. "Anatomy of Distributive Changes in Argentina," Chapters, in: Werner Baer & David Fleischer (ed.), The Economies of Argentina and Brazil, chapter 10, Edward Elgar Publishing.
    11. Remes Sami, 2019. "Middle class decline in Finland 1995-2012 : Decomposition and directional mobility," Working Papers 1925, Tampere University, Faculty of Management and Business, Economics.
    12. Richard V. Burkhauser & Takashi Oshio & Ludmila Rovba, 2008. "How the Distribution of After-Tax Income Changed Over the 1990s Business Cycle: A Comparison of the United States, Great Britain, Germany and Japan," Journal of Income Distribution, Ad libros publications inc., vol. 17(1), pages 87-109, March.
    13. Mary C. Daly & Robert G. Valletta, 2000. "Inequality and poverty in the United States: the effects of changing family behavior and rising wage dispersion," Working Paper Series 2000-06, Federal Reserve Bank of San Francisco.
    14. Longford, N.T. & Pittau, M.G., 2006. "Stability of household income in European countries in the 1990s," Computational Statistics & Data Analysis, Elsevier, vol. 51(2), pages 1364-1383, November.
    15. M. Grazia Pittau & Roberto Zelli, 2001. "Income distribution in Italy: A nonparametric analysis," Statistical Methods & Applications, Springer;Società Italiana di Statistica, vol. 10(1), pages 175-189, January.
    16. Bartkowska, Monika & Riedl, Aleksandra, 2012. "Regional convergence clubs in Europe: Identification and conditioning factors," Economic Modelling, Elsevier, vol. 29(1), pages 22-31.
    17. Anthony B. Atkinson & Andrea Brandolini, 2011. "On the identification of the “middle class”," Working Papers 217, ECINEQ, Society for the Study of Economic Inequality.
    18. Dehejia Vivek H. & Voia Marcel C., 2012. "International Income Comparisons and Social Welfare: Methodology, Analysis, and Implications," Journal of Globalization and Development, De Gruyter, vol. 3(1), pages 1-24, June.
    19. Richard V. Burkhauser & Mary C. Daly & Andrew J. Houtenville & Nigar Nargis, 2001. "Economic outcomes of working-age people with disabilities over the business cycle: an examination of the 1980s and 1990s," Working Paper Series 2001-07, Federal Reserve Bank of San Francisco.

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