Academic journal article Monthly Labor Review

Inequality Update. (Precis).(study into Distribution of Wealth during the 1990s)(brief Article)

Academic journal article Monthly Labor Review

Inequality Update. (Precis).(study into Distribution of Wealth during the 1990s)(brief Article)

Article excerpt

Earnings, income, and wealth are unequally distributed among American households and, according to Santiago Budria Rodriguez, Javier Diaz-Gimenez, Vincenzo Quadrini, and Jose-Victor Rios-Rull writing in the Federal Reserve Bank of Minneapolis Quarterly Review, the basic facts about those inequalities did not change much in the 1990s.

Wealth is the most concentrated of the three variables in 1998. Statistics such as the Gini index show that labor earnings are somewhat more concentrated than income in aggregate, but there is a twist to these distributions at the top of the scale. The authors write, "The Lorenz curve for earnings lies below the Lorenz curve for income in the bottom part of the distribution, and these roles are reversed after approximately the 87th percentile. This implies that income is more equally distributed than earnings except in the top tail of the distribution." They attribute this to income transfers to lower income households.

To measure changes in concentration, Rodriguez and his colleagues compared the 1998 results of the 1998 Survey of Consumer Finances (SCF) to those of the 1992 SCF, adjusting the latter for changes in variable definition. …

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