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Capital and labor : the factor income composition of top incomes in the United States, 1962-2006

Author

Listed:
  • Atkinson,Anthony B.
  • Lakner,Christoph
  • Atkinson,Anthony B.
  • Lakner,Christoph

Abstract

This paper finds that capital and labor incomes in the United States have become more closely associated since the 1980s. This contributed to the well-known increase in the top 1 percent's share of total income, exacerbating rising inequality in capital incomes and earnings. The paper shows that the trend in the association is U-shaped, as the recent increase contrasts with a tendency toward a weakening association until the 1980s. The paper uses data derived from tax records, studies the asymmetries in the association, tests for robustness to alternative income definitions, and discusses the potential role of declining top marginal tax rates.

Suggested Citation

  • Atkinson,Anthony B. & Lakner,Christoph & Atkinson,Anthony B. & Lakner,Christoph, 2017. "Capital and labor : the factor income composition of top incomes in the United States, 1962-2006," Policy Research Working Paper Series 8268, The World Bank.
  • Handle: RePEc:wbk:wbrwps:8268
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    Citations

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    Cited by:

    1. Branko Milanovic, 2016. "Increasing Capital Income Share and its Effect on Personal Income Inequality," LIS Working papers 663, LIS Cross-National Data Center in Luxembourg.
    2. Rolf Aaberge & Anthony B. Atkinson & Sebastian Königs, 2018. "From classes to copulas: wages, capital, and top incomes," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(2), pages 295-320, June.
    3. Salvatore Morelli, 2018. "Banking crises in the US: the response of top income shares in a historical perspective," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(2), pages 257-294, June.
    4. Fix, Blair, 2018. "A Hierarchy Model of Income Distribution," Working Papers on Capital as Power 2018/02, Capital As Power - Toward a New Cosmology of Capitalism.
    5. Milanovic, Branko, 2015. "Increasing capital income share and its effect on personal income inequality," MPRA Paper 67661, University Library of Munich, Germany.
    6. Gabriel Zucman, 2019. "Global Wealth Inequality," NBER Working Papers 25462, National Bureau of Economic Research, Inc.
    7. David Gallusser & Matthias Krapf, 2019. "Joint Income-Wealth Inequality: An Application Using Administrative Tax Data," CESifo Working Paper Series 7876, CESifo Group Munich.

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