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Macroeconomic Covariates of Real Household Incomes in America

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Abstract

Household survey data for the U.S. spanning 30 years are used to study the co-movements between log real household incomes and standard macroeconomic indicators. The semi-elasticities of the income quantiles with respect to the macro indicators are found to vary substantially and non-monotonically across the distribution. The unemployment rate matters at all income levels, but especially so for the poorest, living at the estimated income floor. Inflation rates matter more at middle incomes. Recessions are poverty-increasing, but also skewness-decreasing, with implications for the political economy of redistribution. These complex distributional effects are obscured by standard scaler measures of income inequality. Classification- D31, E31, E32

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  • Martin Ravallion, 2022. "Macroeconomic Covariates of Real Household Incomes in America," Working Papers gueconwpa~22-22-04, Georgetown University, Department of Economics.
    • Handle: RePEc:geo:guwopa:gueconwpa~22-22-04
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    Keywords

    Unemployment; inflation; growth; poverty; inequality; skewness;
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