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Wage Inequality, Earnings Inequality and Poverty in the U.S. Over the Last Quarter of the Twentieth Century

Author

Listed:
  • Peter Gottschalk

    (Boston College)

  • Sheldon Danziger

    (University of Michigan)

Abstract

This paper tracks distributional changes over the last quarter of the twentieth century. We focus on three conceptually distinct distributions: the distribution of wages, the distribution of annual earnings and the distribution of total family income adjusted for family size. We show that all three distributions became less equal during the last half of the 1970's and the 1980's. This was, however, not the case during the 1990's. Wage inequality stabilized, earnings inequality declined and family income inequality actually continued to rise. We decompose changes in family income inequality over the last quarter century and show that roughly half of the increase is accounted for by changes in the distribution of earnings. This suggests that further research on family income inequality should pay as much attention to changes in the distribution of other income sources as to factors affecting the labor market.

Suggested Citation

  • Peter Gottschalk & Sheldon Danziger, 2003. "Wage Inequality, Earnings Inequality and Poverty in the U.S. Over the Last Quarter of the Twentieth Century," Boston College Working Papers in Economics 560, Boston College Department of Economics.
    • Handle: RePEc:boc:bocoec:560
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    References listed on IDEAS

    as
    1. Anthony F. Shorrocks, 1983. "The Impact of Income Components on the Distribution of Family Incomes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(2), pages 311-326.
    2. Peter Gottschalk, 1997. "Inequality, Income Growth, and Mobility: The Basic Facts," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 21-40, Spring.
    3. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
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    Cited by:

    1. Arnstein Aassve & Simon Burgess & Matt Dickson & Carol Propper, 2005. "Modelling Poverty by not Modelling Poverty: An Application of a Simultaneous Hazards Approach to the UK," The Centre for Market and Public Organisation 05/134, The Centre for Market and Public Organisation, University of Bristol, UK.
    2. Tandon, Anjali, 2021. "Inter-industry Wage Differentials in Indian Manufacturing: Convergence or Persistence?," MPRA Paper 114622, University Library of Munich, Germany, revised 2022.
    3. David Domeij, 2008. "Rising Earnings Inequality in Sweden: The Role of Composition and Prices," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(3), pages 609-634, September.
    4. Torben M. Andersen, 2015. "Incentive And Insurance Effects Of Income Taxation," Bulletin of Economic Research, Wiley Blackwell, vol. 67(3), pages 209-226, July.
    5. Valerie Ledwith, 2009. "Open Enrolment and Student Sorting in Public Schools: Evidence from Los Angeles County," Environment and Planning A, , vol. 41(5), pages 1109-1128, May.

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    More about this item

    Keywords

    Poverty; earnings inequality; family income inequality;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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