2022/06/09 by Ji Hyung Lee, Yuya Sasaki, Lee, Ji Hyung +5
Economics, Econometrics and Finance · #FOS: Economics and business #Fiscal Policies and Political Economy #Fiscal Policy and Economic Growth #General Economics (econ.GN) #Monetary Policy and Economic Impact
paper · pdf · doi:10.48550/arxiv.2206.04257
openalex publication_date 2022/06/09 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
Accurately estimating income Pareto exponents is challenging due to limitations in data availability and the applicability of statistical methods. Using tabulated summaries of incomes from tax authorities and a recent estimation method, we estimate income Pareto exponents in U.S. for 1916-2019. We find that during the past three decades, the capital and labor income Pareto exponents have been stable at around 1.2 and 2. Our findings suggest that the top tail income and wealth inequality is higher and wealthy agents have twice as large an impact on the aggregate economy than previously thought but there is no clear trend post-1985.