IDEAS home Printed from https://ideas.repec.org/a/bla/revinw/v68y2022i4p906-921.html
   My bibliography  Save this article

Income Mobility and Inequality: Adult‐Level Measures From the Us Tax Data Since 1979

Author

Listed:
  • David Splinter

Abstract

A panel of tax returns shows that income mobility can explain between none and three‐quarters of the increase in annual inequality since the 1980s. These estimates are sensitive to different measures of inequality, income definitions, and sample restrictions—mostly due to different treatments of mean‐reverting income changes among those with temporarily low incomes. This range of results suggests that sensitivity analyses are crucial to understand the robustness of income inequality and mobility measures.

Suggested Citation

  • David Splinter, 2022. "Income Mobility and Inequality: Adult‐Level Measures From the Us Tax Data Since 1979," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(4), pages 906-921, December.
    • Handle: RePEc:bla:revinw:v:68:y:2022:i:4:p:906-921
    DOI: 10.1111/roiw.12501
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/roiw.12501
    Download Restriction: no
    File URL: https://libkey.io/10.1111/roiw.12501?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jason DeBacker & Bradley Heim & Vasia Panousi & Shanthi Ramnath & Ivan Vidangos, 2013. "Rising Inequality: Transitory or Persistent? New Evidence from a Panel of U.S. Tax Returns," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(1 (Spring), pages 67-142.
    2. Stephen P. Jenkins & Philippe Van Kerm, 2006. "Trends in income inequality, pro-poor income growth, and income mobility," Oxford Economic Papers, Oxford University Press, vol. 58(3), pages 531-548, July.
    3. Henry S Farber & Daniel Herbst & Ilyana Kuziemko & Suresh Naidu, 2021. "Unions and Inequality over the Twentieth Century: New Evidence from Survey Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(3), pages 1325-1385.
    4. David Splinter, 2019. "Who Pays No Tax? The Declining Fraction Paying Income Taxes And Increasing Tax Progressivity," Contemporary Economic Policy, Western Economic Association International, vol. 37(3), pages 413-426, July.
    5. Hyatt, Henry R. & Spletzer, James R., 2017. "The recent decline of single quarter jobs," Labour Economics, Elsevier, vol. 46(C), pages 166-176.
    6. Thomas Piketty & Emmanuel Saez & Gabriel Zucman, 2018. "Distributional National Accounts: Methods and Estimates for the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(2), pages 553-609.
    7. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez & Nicholas Turner, 2014. "Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility," American Economic Review, American Economic Association, vol. 104(5), pages 141-147, May.
    8. Jeff Larrimore & Jake Mortenson & David Splinter, 2020. "Presence and Persistence of Poverty in US Tax Data," NBER Chapters, in: Measuring Distribution and Mobility of Income and Wealth, pages 383-409, National Bureau of Economic Research, Inc.
    9. Auten, Gerald & Gee, Geoffrey, 2009. "Income Mobility in the United States: New Evidence From Income Tax Data," National Tax Journal, National Tax Association;National Tax Journal, vol. 62(2), pages 301-328, June.
    10. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1553-1623.
    11. Robert Moffitt & Sisi Zhang, 2018. "Income Volatility and the PSID: Past Research and New Results," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 277-280, May.
    12. Dirk Krueger & Fabrizio Perri, 2006. "Does Income Inequality Lead to Consumption Inequality? Evidence and Theory -super-1," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(1), pages 163-193.
    13. Comin, Diego & Groshen, Erica L. & Rabin, Bess, 2009. "Turbulent firms, turbulent wages?," Journal of Monetary Economics, Elsevier, vol. 56(1), pages 109-133, January.
    14. James P. Ziliak & Charles Hokayem & Christopher R. Bollinger, 2022. "Trends in Earnings Volatility Using Linked Administrative and Survey Data," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 41(1), pages 12-19, December.
    15. Gary Fields, 2010. "Does income mobility equalize longer-term incomes? New measures of an old concept," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(4), pages 409-427, December.
    16. Celik Sule & Juhn Chinhui & McCue Kristin & Thompson Jesse, 2012. "Recent Trends in Earnings Volatility: Evidence from Survey and Administrative Data," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(2), pages 1-26, June.
    17. Maasoumi, Esfandiar & Zandvakili, Sourushe, 1990. "Generalized entropy measures of mobility for different sexes and income levels," Journal of Econometrics, Elsevier, vol. 43(1-2), pages 121-133.
    18. Jonathan D. Fisher & David S. Johnson & Timothy M. Smeeding, 2013. "Measuring the Trends in Inequality of Individuals and Families: Income and Consumption," American Economic Review, American Economic Association, vol. 103(3), pages 184-188, May.
    19. Catherine De Fontenay & Tue Gørgens & Haoming Liu, 2002. "The Role of Mobility in Offsetting Inequality: A Nonparametric Exploration of the CPS," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(3), pages 347-370, September.
    20. Bruce D. Meyer & James X. Sullivan, 2017. "Consumption and Income Inequality in the U.S. Since the 1960s," NBER Working Papers 23655, National Bureau of Economic Research, Inc.
    21. Shorrocks, Anthony, 1978. "Income inequality and income mobility," Journal of Economic Theory, Elsevier, vol. 19(2), pages 376-393, December.
    22. John M. Abowd & Kevin L. McKinney & Nellie L. Zhao, 2018. "Earnings Inequality and Mobility Trends in the United States: Nationally Representative Estimates from Longitudinally Linked Employer-Employee Data," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 183-300.
    23. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
    24. Jason DeBacker & Bradley Heim & Vasia Panousi & Shanthi Ramnath & Ivan Vidangos, 2013. "Rising Inequality: Transitory or Persistent? New Evidence from a Panel of U.S. Tax Returns," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 44(1 (Spring), pages 67-142.
    25. Fatih Guvenen & Anthony A. Smith, 2014. "Inferring Labor Income Risk and Partial Insurance From Economic Choices," Econometrica, Econometric Society, vol. 82, pages 2085-2129, November.
    26. Dynan Karen & Elmendorf Douglas & Sichel Daniel, 2012. "The Evolution of Household Income Volatility," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(2), pages 1-42, December.
    27. Wojciech Kopczuk & Emmanuel Saez & Jae Song, 2010. "Earnings Inequality and Mobility in the United States: Evidence from Social Security Data Since 1937," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(1), pages 91-128.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Markus Jäntti & Stephen P. Jenkins, 2013. "Income Mobility," SOEPpapers on Multidisciplinary Panel Data Research 607, DIW Berlin, The German Socio-Economic Panel (SOEP).
    2. Robert Moffitt & Sisi Zhang, 2022. "Estimating Trends in Male Earnings Volatility with the Panel Study of Income Dynamics," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 41(1), pages 20-25, December.
    3. Michael D. Carr & Robert A. Moffitt & Emily E. Wiemers, 2020. "Reconciling Trends in Volatility: Evidence from the SIPP Survey and Administrative Data," NBER Working Papers 27672, National Bureau of Economic Research, Inc.
    4. Maggie R. Jones & Adam Bee & Amanda Eng & Kendall Houghton & Nikolas Pharris-Ciurej & Sonya R. Porter & Jonathan Rothbaum & John Voorheis, 2024. "Mobility, Opportunity, and Volatility Statistics (MOVS): Infrastructure Files and Public Use Data," Working Papers 24-23, Center for Economic Studies, U.S. Census Bureau.
    5. Robert Moffitt & John Abowd & Christopher Bollinger & Michael Carr & Charles Hokayem & Kevin McKinney & Emily Wiemers & Sisi Zhang & James Ziliak, 2022. "Reconciling Trends in U.S. Male Earnings Volatility: Results from Survey and Administrative Data," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 41(1), pages 1-11, December.
    6. Berman, Yonatan, 2018. "Inclusive Growth and Absolute Intragenerational Mobility in the United States, 1962-2014," MPRA Paper 89572, University Library of Munich, Germany.
    7. Yonatan Berman, 2022. "Absolute intragenerational mobility in the United States, 1962–2014," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(3), pages 587-609, September.
    8. Cappellari, Lorenzo & Jenkins, Stephen P., 2014. "Earnings and labour market volatility in Britain, with a transatlantic comparison," Labour Economics, Elsevier, vol. 30(C), pages 201-211.
    9. Mario Alloza, 2021. "The impact of taxes on income mobility," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(4), pages 794-854, August.
    10. Robert A. Moffitt, 2020. "Reconciling Trends in U.S. Male Earnings Volatility: Results from a Four Data Set Project," NBER Working Papers 27664, National Bureau of Economic Research, Inc.
    11. Robert Moffitt & Sisi Zhang, 2018. "Income Volatility and the PSID: Past Research and New Results," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 277-280, May.
    12. Aart Kraay & Roy Weide, 2022. "Measuring intragenerational mobility using aggregate data," Journal of Economic Growth, Springer, vol. 27(2), pages 273-314, June.
    13. Carr, Michael D. & Wiemers, Emily E., 2022. "The decline in long-term earnings mobility in the U.S.: Evidence from survey-linked administrative data," Labour Economics, Elsevier, vol. 78(C).
    14. Carr, Michael D. & Wiemers, Emily E., 2021. "The role of low earnings in differing trends in male earnings volatility," Economics Letters, Elsevier, vol. 199(C).
    15. Robert Moffitt & Sisi Zhang, 2018. "The PSID and Income Volatility: Its Record of Seminal Research and Some New Findings," The ANNALS of the American Academy of Political and Social Science, , vol. 680(1), pages 48-81, November.
    16. Cappellari, Lorenzo & Jenkins, Stephen P., 2014. "Earnings and labour market volatility in Britain, with a transatlantic comparison," Labour Economics, Elsevier, vol. 30(C), pages 201-211.
    17. Muthitacharoen, Athiphat & Burong, Trongwut, 2023. "Climbing the economic ladder: Earnings inequality and intragenerational mobility among Thai formal workers," Journal of Asian Economics, Elsevier, vol. 89(C).
    18. Keshav Dogra & Olga Gorbachev, 2016. "Consumption Volatility, Liquidity Constraints and Household Welfare," Economic Journal, Royal Economic Society, vol. 126(597), pages 2012-2037, November.
    19. Dang,Hai-Anh H. & Lokshin,Michael M. & Abanokova,Ksenia & Bussolo,Maurizio, 2018. "Inequality and Welfare Dynamics in the Russian Federation during 1994-2015," Policy Research Working Paper Series 8629, The World Bank.
    20. Alvarez-Cuadrado, Francisco & Japaridze, Irakli, 2017. "Trickle-down consumption, financial deregulation, inequality, and indebtedness," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 1-26.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:revinw:v:68:y:2022:i:4:p:906-921. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/iariwea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.