TY - JOUR
T1 - Cross-sectional facts for macroeconomists
AU - Krueger, Dirk
AU - Perri, Fabrizio
AU - Pistaferri, Luigi
AU - Violante, Giovanni L.
N1 - Funding Information:
✩ We thank the participants of the 2007 Philadelphia conference on “Heterogeneity in Macroeconomics” for useful comments, Jacek Rothert, Ctirad Slavik, and Chris Tonetti for excellent research assistance, and the NSF and PIER for financial support. * Corresponding author. E-mail addresses: [email protected] (D. Krueger), [email protected] (F. Perri), [email protected] (L. Pistaferri), [email protected] (G.L. Violante).
Copyright:
Copyright 2009 Elsevier B.V., All rights reserved.
PY - 2010/1
Y1 - 2010/1
N2 - This article provides an introduction to the special issue of the Review of Economic Dynamics on "Cross-Sectional Facts for Macroeconomists". The issue documents, for nine countries, the level and the evolution, over time and over the life cycle, of several dimensions of economic inequality, including wages, labor earnings, income, consumption, and wealth. After describing the motivation and the common methodology underlying this empirical project, we discuss selected results, with an emphasis on cross-country comparisons. Most, but not all, countries experienced substantial increases in wages and earnings inequality, over the last three decades. While the trend in the skill premium differed widely across countries, the experience premium rose and the gender premium fell virtually everywhere. At a higher frequency, earnings inequality appears to be strongly counter-cyclical. In all countries, government redistribution through taxes and transfers reduced the level, the trend and the cyclical fluctuations in income inequality. The rise in income inequality was stronger at the bottom of the distribution. Consumption inequality increased less than disposable income inequality, and tracked the latter much more closely at the top than at the bottom of the distribution. Measuring the age-profile of inequality is challenging because of the interplay of time and cohort effects.
AB - This article provides an introduction to the special issue of the Review of Economic Dynamics on "Cross-Sectional Facts for Macroeconomists". The issue documents, for nine countries, the level and the evolution, over time and over the life cycle, of several dimensions of economic inequality, including wages, labor earnings, income, consumption, and wealth. After describing the motivation and the common methodology underlying this empirical project, we discuss selected results, with an emphasis on cross-country comparisons. Most, but not all, countries experienced substantial increases in wages and earnings inequality, over the last three decades. While the trend in the skill premium differed widely across countries, the experience premium rose and the gender premium fell virtually everywhere. At a higher frequency, earnings inequality appears to be strongly counter-cyclical. In all countries, government redistribution through taxes and transfers reduced the level, the trend and the cyclical fluctuations in income inequality. The rise in income inequality was stronger at the bottom of the distribution. Consumption inequality increased less than disposable income inequality, and tracked the latter much more closely at the top than at the bottom of the distribution. Measuring the age-profile of inequality is challenging because of the interplay of time and cohort effects.
KW - Consumption
KW - Estimation of earnings dynamics
KW - Government redistribution
KW - Income
KW - Inequality over the business cycle
KW - Life-cycle inequality
KW - Long-run trends in inequality
KW - Wages
KW - Wealth
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U2 - 10.1016/j.red.2009.12.001
DO - 10.1016/j.red.2009.12.001
M3 - Article
AN - SCOPUS:72249118464
SN - 1094-2025
VL - 13
SP - 1
EP - 14
JO - Review of Economic Dynamics
JF - Review of Economic Dynamics
IS - 1
ER -