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Top Earners: Cross-Country Facts

Author

Listed:
  • Alejandro Badel

    () (Bureau of Labor Statistics and Georgetown University)

  • Moira Daly

    () (Copenhagen Business School)

  • Mark Huggett

    () (Georgetown University)

  • Martin Nybom

    () (Stockholm University)

Abstract

We provide a common set of life-cycle earnings statistics based on administrative data from the United States, Canada, Denmark and Sweden. We find three qualitative patterns, which are common across countries. First, top-earnings inequality increases over the working lifetime. Second, the extreme right tail of the earnings distribution becomes thicker with age over the working lifetime. Third, top lifetime earners exhibit dramatically higher earnings growth over their working lifetime. Models of top earners should account for these three patterns and, importantly, for how they quantitatively differ across countries.

Suggested Citation

  • Alejandro Badel & Moira Daly & Mark Huggett & Martin Nybom, 2017. "Top Earners: Cross-Country Facts," Working Papers 2017-061, Human Capital and Economic Opportunity Working Group.
  • Handle: RePEc:hka:wpaper:2017-061
    Note: M
    as

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    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Badel_Daly_Huggett_etal_2017_top-earners.pdf
    File Function: First version, June 22, 2017
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    References listed on IDEAS

    as
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    4. Badel, Alejandro & Huggett, Mark, 2017. "The sufficient statistic approach: Predicting the top of the Laffer curve," Journal of Monetary Economics, Elsevier, vol. 87(C), pages 1-12.
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    More about this item

    Keywords

    Earnings; Inequality; top earners; top incomes;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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