Trends and Levels of Income Inequality in Wisconsin, 1919-1941: The Effect of Using Different Data Sources
Posted: 17 May 2017 Last revised: 15 Jan 2019
Date Written: May 17, 2017
In this short note, we use two different sources available for the state of Wisconsin in order to assess the quality of income inequality measurements in the United States between the two World Wars. By comparing estimates derived from federal income tax records with estimates derived from the state income tax for Wisconsin, we find that each series produces highly different patterns and levels in inequality for the state. These findings attest to the high sensitivity of modern distributional estimation techniques to issues of quality with their underlying data sources. Noting this concern, we argue for greater caution in the use of income tax data for measuring historical income inequality.
Keywords: Inequality, Top Incomes, US Economic History
JEL Classification: H2, N32
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