Income Inequality in the United States, 1947-1985

Income Inequality in the United States, 1947-1985

Income Inequality in the United States, 1947-1985

Income Inequality in the United States, 1947-1985

Synopsis

This interdisciplinary work presents the results of a comprehensive study of the causes and consequences of the rise in family income inequality during the period between 1947 and 1985. By examining the impact of changing industrial and occupational employment, population age structure, household structure, female labor force participation, and government spending on income inequality, the book systematically estimates and compares the influences on the inequality upturn. Strong evidence is presented which argues that the predominant influence on increasing income inequality is the changing economy, which has resulted in increased income at the top of the distribution and reduced income at the bottom.

Excerpt

This book reports results of a systematic, empirical study of how deindustrialization, population age structure, female labor force participation, and government spending on social insurance affect income inequality and distribution. It directly addresses the two issues of income polarization (bottom-to-top income movement) and the declining middle class by analyzing yearly income data from 1947 to 1985. Because of the study's empirical nature, theoretical distinctions in welfare theory and normative judgments about ideal income distributions are not included. Since the study focuses on relative changes in the income distribution, discussion of absolute changes in the level of living are minimal.

Since the definition of equality is inherently subjective, discussions of income inequality often evoke much normative debate. This study minimizes normative judgments. Income inequality and distribution are quantified with the most widely recognized statistical measures, the Gini coefficient and quintile income distributions. These measures quantify the relative dispersion of the frequency distribution of income without referencing "goodness" or "badness" (e.g., no parameters are fit to a selected distribution). Of course, without a non-native basis, this study can only describe one outcome of society--the income distribution--and cannot describe associated societal welfare.

The Gini coefficient is used to measure the deviation from "perfect equality"--roughly defined as each fifth (quintile) of the population receiving one- fifth of the income. To restrict normative interpretations of inequality, the Gini coefficient is not used as an absolute inequality measure at any point in time but as a comparative measure estimating income inequality movement. Because differing income distributions can produce similar Gini coefficients, quintile . . .

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