Trends in the Distribution of Household Income, 1979–2010
Trends in the Distribution of Household Income, 1979–2010
Numerous studies have found that the distribution of income in the United States has become increasingly unequal—in particular, the share of income accruing to the highest-income households has increased, whereas the share accruing to other households has declined. The primary source for information on the income distribution in the United States is the Annual Social and Economic Supplement to the Census Bureau’s Current Population Survey (CPS). In an influential paper, Thomas Piketty and Emmanuel Saez employed an alternative method, using data from tax returns to examine market income inequality in the United States over almost a century. Each of those data sources has strengths and limitations. This paper presents estimates of the distribution of household income in the United States, derived from a statistical combination of data from the Current Population Survey and from samples of income tax returns. This combined series overcomes some limitations of estimates produced from either the CPS or the income tax data alone: it covers the full population while maintaining the richness at the top of the income distribution, and can yield comprehensive estimates of the effect of the tax and transfer system on the full income distribution.
Keywords: Current Population Survey, CPS, income distribution, highest-income households, market income inequality, tax returns
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