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Inequality Update: Who Gains When Income Grows?

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  • Pavlina R. Tcherneva

Abstract

Since the 1980s, economic recoveries in the United States have been delivering the vast majority of income growth to the wealthiest households. This policy note updates the analysis in One-Pager No. 47 and Policy Note 2015/4 with the latest data through 2015, looking at the distribution of average income growth (with and without capital gains) between the bottom 90 percent and top 10 percent of households, and between the bottom 99 percent and top 1 percent of households. Little has changed when considering the distribution of average income growth in the current recovery (up to 2015) between the bottom 90 percent and top 10 percent of families, with or without capital gains. Although average real income for the bottom 90 percent of households is no longer shrinking, these families still capture a historically small proportion of that growth—only between 18 percent and 22 percent. The growing economy continues to deliver the most benefits to the wealthiest families.

Suggested Citation

  • Pavlina R. Tcherneva, 2017. "Inequality Update: Who Gains When Income Grows?," Economics Policy Note Archive 17-1, Levy Economics Institute.
    • Handle: RePEc:lev:levypn:17-1
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    1. Thomas Piketty & Emmanuel Saez, 2003. "Income Inequality in the United States, 1913–1998," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 1-41.
    2. Emmanuel Saez, 2013. "Striking it Richer: The Evolution of Top Incomes in the United States (Updated with 2011 preliminary estimates)," Technical Notes 201301, World Inequality Lab.
    3. Emmanuel Saez, 2013. "Striking it Richer: The Evolution of Top Incomes in the United States (Updated with 2012 preliminary estimates)," Technical Notes 201303, World Inequality Lab.
    4. Pavlina Tcherneva, 2014. "Reorienting fiscal policy: a bottom-up Approach," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 37(1), pages 43-66.
    5. Emmanuel Saez, 2015. "Striking it Richer: The Evolution of Top Incomes in the United States (Updated with 2013 preliminary estimates)," Technical Notes 201501, World Inequality Lab.
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    Cited by:

    1. György Matolcsy, 2020. "Competitiveness as a Decisive Criterion for Sustainability," Public Finance Quarterly, State Audit Office of Hungary, vol. 65(6), pages 7-24.

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