Income Distribution and Macroeconomic Performance in the United States

August 1, 1996

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Format: Chicago

Jeffrey D. Cole, and Christopher M Towe. Income Distribution and Macroeconomic Performance in the United States, (USA: International Monetary Fund, 1996) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The factors underlying the rise in U.S. income inequality since the mid-1970s are examined. The results suggest that the trend increase in income inequality has not been related to macroeconomic developments, such as income growth or import penetration, but that the income distribution is sensitive to the cycle. Important factors that do help explain the widening of the income distribution include the increased investment in technology and the decline in the minimum wage. The rise in the share of single female-headed households, the increased proportion of households headed by someone over the age of 35, and the fall in the child-dependency ratio also help explain movements in income shares.

Subject: Consumption distribution, Income distribution, Income inequality, Labor, Minimum wages, National accounts, Personal income, Wages

Keywords: Consumption distribution, Europe, Gini coefficient, Gini-ratio equation, Income, Income distribution, Income distribution, Income inequality, Income share, Income-share equation, Personal income, Quintile, Quintile share, Share, Wages, WP

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1996/097
Stock No:

WPIEA0971996
ISBN:

9781451851977
ISSN:

1018-5941

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