Journal Article

Recent trends in top income shares in the United State: reconciling estimates from March CPS and IRS tax return data

By Richard V. Burkhauser, Shuaizhang Feng, Stephen P. Jenkins and Jeff Larrimore

Publication details

Publication date
Published in
Review of Economics and Statistics
Volume
94
Pages
pp. 371–388
Publisher
MIT Press
DOI
http://dx.doi.org/10.1162/REST_a_00200
ISSN
346535

Summary

Although most U.S. income inequality research is based on public use March CPS data, a new wave of research using IRS tax return data reports substantially faster inequality growth for recent years. We show that these apparently inconsistent estimates are largely reconciled when the income distribution and inequality are defined the same way. Using internal CPS data for 1967 to 2006, we show that CPS-based estimates of top income shares are similar to IRS data-based estimates reported by Piketty and Saez (2003). Our results imply that income inequality changes since 1993 are largely driven by changes in incomes of the top 1%.

Notes

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