A Methodologically Consistent Measure of Income Inequality in the United States, 1917 to 2020

Abstract

We present a new series for top income concentrations in the United States, using a consistent data construction methodology for the entire range of available data. This is meant to connect efforts that have separately considered pre-1960 and post-1960 inequality measures. Our series improves upon the series of Piketty and Saez (2003), correcting for data discontinuities induced by arbitrary choices that introduce distortions to their fiscal income denominator between the mid-1980s and the present. We then link our series with previous corrections to the Piketty-Saez series, creating a yearly estimate of top income concentration from 1917 to 2020. The results indicate a more tempered rise in inequality in recent decades than the previous literature.

Keywords: Income inequality, data quality, Piketty, Saez, economic history

JEL Classification: D63, D31, H23