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Uncovering the American Dream: Inequality and Mobility in Social Security Earnings Data since 1937

Author

Listed:
  • Wojciech Kopczuk
  • Emmanuel Saez
  • Jae Song

Abstract

This paper uses Social Security Administration longitudinal earnings micro data since 1937 to analyze the evolution of inequality and mobility in the United States. Earnings inequality follows a U-shape pattern, decreasing sharply up to 1953 and increasing steadily afterwards. We find that short-term and long-term (rank based) mobility among all workers has been quite stable since 1950 (after a temporary surge during World War II). Therefore, the pattern of annual earnings inequality is very close to the pattern of inequality of longer term earnings. Mobility at the top has also been very stable and has not mitigated the dramatic increase in annual earnings concentration since the 1970s. However, the stability in long-term earnings mobility among all workers masks substantial heterogeneity across demographic groups. The decrease in the gender earnings gap and the substantial increase in upward mobility over a career for women is the driving force behind the relative stability of overall mobility measures which mask declines in mobility among men. In contrast, overall inequality and mobility patterns are not significantly influenced by the changing size and structure of immigration nor by changes in the black/white earnings gaps.

Suggested Citation

  • Wojciech Kopczuk & Emmanuel Saez & Jae Song, 2007. "Uncovering the American Dream: Inequality and Mobility in Social Security Earnings Data since 1937," NBER Working Papers 13345, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:13345
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    References listed on IDEAS

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    Cited by:

    1. Lena Edlund & Cecilia Machado & Maria Micaela Sviatschi, 2015. "Bright Minds, Big Rent: Gentrification and the Rising Returns to Skill," NBER Working Papers 21729, National Bureau of Economic Research, Inc.
    2. Alexander Gelber, 2008. "Taxation and Family Labor Supply," 2008 Meeting Papers 249, Society for Economic Dynamics.
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    5. Birgitta Jansson, 2014. "Intragenerational Income Mobility in Gothenburg, Sweden, 1925–94: Before, during, and after the Rise of the Welfare State," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 54(1), pages 14-36, March.
    6. Jonathan Heathcote & Fabrizio Perri & Giovanni L. Violante, 2010. "Unequal We Stand: An Empirical Analysis of Economic Inequality in the United States: 1967-2006," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 15-51, January.
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    JEL classification:

    • D3 - Microeconomics - - Distribution
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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