The Anatomy of Increased Inequality of U.S. Family Incomes

47 Pages Posted: 13 Jul 2006

Abstract

This essay explores various components of a measure of pretax U.S. family income after adjusting for the size of the family in the U.S. in 1975 and 2000. Using data from the Panel Study on Income Dynamics, an important stylized fact is revealed: The rising inequality of property incomes, particularly dividends, interest, and rent, have played the most important role in the increase of overall income inequality. Contrary to popular belief, increasing inequality of labor income plays only a secondary role. For property incomes a simple model shows why this determining role in income inequality should continue for the next decade and, most likely, even further in the future.

Keywords: Income distribution, property income, consumer debt

JEL Classification: D31, J30, D10

Suggested Citation

Pryor, Frederic L., The Anatomy of Increased Inequality of U.S. Family Incomes. Journal of Socio-Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=913783

Frederic L. Pryor (Contact Author)

Swarthmore College ( email )

500 College Ave
Swarthmore, PA 19081
United States

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