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What accounts for the rising share of women in the top 1%?

Author

Listed:
  • Richard V. Burkhauser

    (Cornell University; IZA; NBER)

  • Nicolas Hérault

    (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne)

  • Stephen P. Jenkins

    (LSE, ISER (University of Essex); University of Melbourne; IZA)

  • Roger Wilkins

    (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne)

Abstract

The share of women in the top 1% of the UK’s income distribution has been growing over the last two decades (as in several other countries). Our first contribution is to account for this secular change using regressions of the probability of being in the top 1%, fitted separately for men and women, in order to contrast between the sexes the role of changes in characteristics and changes in returns to characteristics. We show that the rise of women in the top 1% is primarily accounted for by their greater increases (relative to men) in the number of years spent in full-time education. Although most top income analysis uses tax return data, we derive our findings taking advantage of the much more extensive information about personal characteristics that is available in survey data. Our use of survey data requires justification given survey under-coverage of top incomes. Providing this justification is our second contribution.

Suggested Citation

  • Richard V. Burkhauser & Nicolas Hérault & Stephen P. Jenkins & Roger Wilkins, 2020. "What accounts for the rising share of women in the top 1%?," Melbourne Institute Working Paper Series wp2020n09, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2020n09
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    References listed on IDEAS

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    1. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011. "Top Incomes in the Long Run of History," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 3-71, March.
    2. Anthony B. Atkinson & Alessandra Casarico & Sarah Voitchovsky, 2018. "Top incomes and the gender divide," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(2), pages 225-256, June.
    3. Stephen P. Jenkins, 2017. "Pareto Models, Top Incomes and Recent Trends in UK Income Inequality," Economica, London School of Economics and Political Science, vol. 84(334), pages 261-289, April.
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    5. Mark B. Stewart, 2011. "The Changing Picture of Earnings Inequality in Britain and the Role of Regional and Sectoral Differences," National Institute Economic Review, National Institute of Economic and Social Research, vol. 218(1), pages 20-32, October.
    6. Roman Bobilev & Anne Boschini & Jesper Roine, 2020. "Women in the Top of the Income Distribution: What Can We Learn From LIS-Data?," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 6(1), pages 63-107, March.
    7. Richard V. Burkhauser & Nicolas Hérault & Stephen P. Jenkins & Roger Wilkins, 2018. "Survey Under‐Coverage of Top Incomes and Estimation of Inequality: What is the Role of the UK's SPI Adjustment?," Fiscal Studies, John Wiley & Sons, vol. 39(2), pages 213-240, June.
    8. Mike Brewer & Ben Etheridge & Cormac O’Dea, 2017. "Why are Households that Report the Lowest Incomes So Well‐off?," Economic Journal, Royal Economic Society, vol. 127(605), pages 24-49, October.
    9. Richard V Burkhauser & Nicolas Hérault & Stephen P Jenkins & Roger Wilkins, 2018. "Top incomes and inequality in the UK: reconciling estimates from household survey and tax return data," Oxford Economic Papers, Oxford University Press, vol. 70(2), pages 301-326.
    10. Yun, Myeong-Su, 2004. "Decomposing differences in the first moment," Economics Letters, Elsevier, vol. 82(2), pages 275-280, February.
    11. Chris Belfield & Richard Blundell & Jonathan Cribb & Andrew Hood & Robert Joyce, 2017. "Two Decades of Income Inequality in Britain: The Role of Wages, Household Earnings and Redistribution," Economica, London School of Economics and Political Science, vol. 84(334), pages 157-179, April.
    12. Boschini, Anne & Gunnarsson, Kristin & Roine, Jesper, 2020. "Women in top incomes – Evidence from Sweden 1971–2017," Journal of Public Economics, Elsevier, vol. 181(C).
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. What Accounts for the Rising Share of Women in the Top 1%?
      by maximorossi in NEP-LTV blog on 2020-07-01 14:43:12
    2. What Accounts for the Rising Share of Women in the Top 1%?
      by maximorossi in NEP-LTV blog on 2020-07-21 17:46:52

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    2. Ellie Benton & Anne Power, 2021. "CASE Annual Report 2020," CASE Reports casereport136, Centre for Analysis of Social Exclusion, LSE.

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    More about this item

    Keywords

    top incomes; women; survey data; decomposition;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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