Inequality and Poverty in the United States: The Aftermath of the Great Recession

49 Pages Posted: 16 Oct 2013

See all articles by Jeffrey P. Thompson

Jeffrey P. Thompson

New England Public Policy Institute, Federal Reserve Bank of Boston; Federal Reserve Board of Governors

Timothy M. Smeeding

University of Wisconsin - Madison

Date Written: July 5, 2013

Abstract

This paper explores trends in inequality and poverty using both market and after-tax and transfer income in the period during and after the Great Recession (through 2011). Using market income (or wages), inequality and poverty rose sharply between 2008 and 2010. The primary exception is measures for the top of the distribution; annual wage and income shares of the top one percent dipped in 2008 and 2009. Including taxes and transfers, broad-based inequality measures also fell, and the poverty increase was muted. Tax and transfer policies lowered inequality and poverty, but those policies were not equal across the population. Poverty declined among the elderly, changed little among children, and rose sharply among the working-age. Inequality fell across the total population, but was unchanged among working-age households. Since 2009, as the economy has grown slowly, inequality has risen for all groups, and poverty remains high for the working-age.

Keywords: Inequality, poverty, income distribution, social welfare policy

JEL Classification: D31, I30

Suggested Citation

Thompson, Jeffrey P. and Smeeding, Timothy M., Inequality and Poverty in the United States: The Aftermath of the Great Recession (July 5, 2013). FEDS Working Paper No. 2013-51, Available at SSRN: https://ssrn.com/abstract=2340665 or http://dx.doi.org/10.2139/ssrn.2340665

Jeffrey P. Thompson (Contact Author)

New England Public Policy Institute, Federal Reserve Bank of Boston ( email )

600 Atlantic Avenue
Boston, MA 02210
United States

Federal Reserve Board of Governors ( email )

Washington, DC 20551
United States

HOME PAGE: http://https://www.federalreserve.gov/econres/jeffrey-p-thompson.htm

Timothy M. Smeeding

University of Wisconsin - Madison ( email )

1180 Observatory Drive
Madison, WI 53706
United States
608-890-1317 (Phone)
608-265-3119 (Fax)

HOME PAGE: http://www.lafollette.wisc.edu/facultystaff/smeeding-timothy.html

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