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Estimating trends in US income inequality using the Current Population Survey: the importance of controlling for censoring

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Abstract

We analyze trends in US size-adjusted household income inequality between 1975 and 2004 using the most commonly used data source—the public use version of the March Current Population Survey. But, unlike most researchers, we also give substantial attention to the problems caused by the topcoding of each income source in the CPS data. Exploiting our access to Census Bureau internal CPS data, we examine estimates from data incorporating imputations for topcoded incomes derived from cell means and estimates from data multiply-imputed from parametric distribution models. Our analysis yields robust conclusions about inequality trends. The upward trend in US income inequality that began in the mid-1970s and increased in the 1980s slowed markedly after 1993.

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Authors and Affiliations

  1. Department of Policy Analysis & Management, Cornell University, 125 MVR Hall, Ithaca, NY, 14853, USA

    Richard V. Burkhauser

  2. Princeton University, 411A Robertson Hall, Princeton, NJ, 08540, USA

    Shuaizhang Feng

  3. School of Economics, Shanghai University of Finance and Economics, Room 715, Building of School of Economics, 777 Guoding Road, Shanghai, 200433, China

    Shuaizhang Feng

  4. Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, CO4 3SQ, United Kingdom

    Stephen P. Jenkins

  5. Department of Economics, Cornell University, 404 Uris Hall, Ithaca, NY, 14853, USA

    Jeff Larrimore

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  1. Richard V. Burkhauser
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  2. Shuaizhang Feng
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Correspondence to Richard V. Burkhauser.

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Burkhauser, R.V., Feng, S., Jenkins, S.P. et al. Estimating trends in US income inequality using the Current Population Survey: the importance of controlling for censoring. J Econ Inequal 9, 393–415 (2011). https://doi.org/10.1007/s10888-010-9131-6

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  • DOI: https://doi.org/10.1007/s10888-010-9131-6

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