Disaggregating the Effect of the Business Cycle on the Distribution of Income

Rebecca M. Blank

NBER Working Paper No. 2397
Issued in October 1987
NBER Program(s):   LS

This paper disaggregates total household income into a complete set of components and studies the comparative cyclicality of these components to economic growth. Comparisons of the relative responsiveness to GNP growth of wages, hours of work, and total labor market income of heads and wives, and transfer income sources of households are made across income, race, sex and age groups. This provides a picture of the channels by which economic growth produces income change. Significant differences in elasticities are found to exist both between different income components and between different population groups for the same components. The narrowing income distribution in times of high growth occurs primarily because of large elasticities on head's labor market income among the poor. Both wages and hours show evidence of cyclicality. The labor market earnings of women -- both wives and household heads -- are far less responsive to growth. Cyclicality in transfer income varies enormously between population groups and by type of transfer.

download in pdf format
   (332 K)

download in djvu format
   (244 K)

email paper

This paper is available as PDF (332 K) or DjVu (244 K) (Download viewer) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w2397

Published: Economica, vol. 56, no. 2, pp141-163, May 1989. citation courtesy of

Users who downloaded this paper also downloaded these:
Blank and Blinder w1567 Macroeconomics, Income Distribution, and Poverty
Blank and shierholz w12494 Exploring Gender Differences in Employment and Wage Trends Among Less-Skilled Workers
Hoynes w7188 The Employment, Earnings, and Income of Less Skilled Workers Over the Business Cycle
Parker and Vissing-Jorgensen w16577 The Increase in Income Cyclicality of High-Income Households and its Relation to the Rise in Top Income Shares
Kose, Otrok, and Prasad w14292 Global Business Cycles: Convergence or Decoupling?
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us