TY  - JOUR
AU  - Heathcote,Jonathan
AU  - Perri,Fabrizio
AU  - Violante,Giovanni L.
TI  - Unequal We Stand: An Empirical Analysis of Economic Inequality in the United States, 1967-2006
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15483
PY  - 2009
Y2  - November 2009
UR  - http://www.nber.org/papers/w15483
L1  - http://www.nber.org/papers/w15483.pdf
N1  - Author contact info:
Jonathan Heathcote
Federal Reserve Bank of Minneapolis
Research Department
90 Hennepin Ave.
Minneapolis, MN 55401
Tel: (612) 204-6385
E-Mail: heathcote@minneapolisfed.org

Fabrizio Perri
Universita' Bocconi
Department of Economics
Via Roentgen, 1 - 20136
Milano, Italy
Tel: +39 02 5836 5793
E-Mail: fperri@umn.edu

Giovanni L. Violante
Department of Economics
New York University
19 W. 4th Street
New York, NY 10012-1119
Tel: 212/992-9771
Fax: 212/995-3932
E-Mail: glv2@nyu.edu
AB  - We conduct a systematic empirical study of cross-sectional inequality in the United States, integrating data from the Current Population Survey, the Panel Study of Income Dynamics, the Consumer Expenditure Survey, and the Survey of Consumer Finances. In order to understand how different dimensions of inequality are related via choices, markets, and institutions, we follow the mapping suggested by the household budget constraint from individual wages to individual earnings, to household earnings, to disposable income, and, ultimately, to consumption and wealth. We document a continuous and sizable increase in wage inequality over the sample period. Changes in the distribution of hours worked sharpen the rise in earnings inequality before 1982, but mitigate its increase thereafter. Taxes and transfers compress the level of income inequality, especially at the bottom of the distribution, but have little effect on the overall trend. Finally, access to financial markets has limited both the level and growth of consumption inequality.
ER  -