NBER Publications by Philip Armour

Contact and additional information for this authorAll publicationsWorking Papers only

Working Papers and Chapters

January 2014Using the Pareto Distribution to Improve Estimates of Topcoded Earnings
with Richard V. Burkhauser, Jeff Larrimore: w19846
Inconsistent censoring of top earnings in the public-use March Current Population Survey (CPS) is an important limitation in using it to measure labor earnings trends. Using less-censored internal CPS data, combined with Pareto estimates from it for internally censored observations, we create an enhanced cell-mean series to capture top earnings in the public-use CPS. We find previous common approaches for imputing topcoded earnings systematically understate top earnings. Annual earnings inequality trends since 1963 using our series closely approximate the substantial increase in earnings inequality observed in Social Security Administration data for working-age commerce and industry workers by Kopczuk, Saez, and Song (2010). However, when considering all workers the level of earnings ine...
December 2013Accounting for Income Changes over the Great Recession (2007-2010) Relative to Previous Recessions: The Importance of Taxes and Transfers
with Jeff Larrimore, Richard V. Burkhauser: w19699
With data from the March CPS and using shift-share analysis, we analyze the factors that account for changes in post-tax post-transfer income during each of the past four recessions. What distinguishes the Great Recession is that drops in employment rather than wage earnings drove income declines. In addition, taxes and transfers played a much greater role in offsetting market income losses —a result largely missed in analyses that do not account for taxes and transfers. This is particularly so among the bottom quintile of the distribution where lower and increased transfers offset more than one-half of the market income declines.
June 2013Levels and Trends in United States Income and Its Distribution A Crosswalk from Market Income Towards a Comprehensive Haig-Simons Income Approach
with Richard V. Burkhauser, Jeff Larrimore: w19110
Recent research on United States levels and trends in income inequality vary substantially in how they measure income. Piketty and Saez (2003) examine market income of tax units based on IRS tax return data, DeNavas-Walt, Proctor, and Smith (2012) and most CPS-based research uses pre-tax, post-transfer cash income of households, while the CBO (2012) uses both data sets and focuses on household size-adjusted comprehensive income of persons, including taxable realized capital gains. This paper provides a crosswalk of income growth across these common income measures using a unified data set. It then uses a more consistent Haig-Simons income definition approach to comprehensive income by incorporating yearly-accrued capital gains to measure yearly changes in wealth rather than focusing solely...

Contact and additional information for this authorAll publicationsWorking Papers only


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