Working Paper: NBER ID: w13345
Authors: Wojciech Kopczuk; Emmanuel Saez; Jae Song
Abstract: This paper uses Social Security Administration longitudinal earnings micro data since 1937 to analyze the evolution of inequality and mobility in the United States. Earnings inequality follows a U-shape pattern, decreasing sharply up to 1953 and increasing steadily afterwards. We find that short-term and long-term (rank based) mobility among all workers has been quite stable since 1950 (after a temporary surge during World War II). Therefore, the pattern of annual earnings inequality is very close to the pattern of inequality of longer term earnings. Mobility at the top has also been very stable and has not mitigated the dramatic increase in annual earnings concentration since the 1970s. However, the stability in long-term earnings mobility among all workers masks substantial heterogeneity across demographic groups. The decrease in the gender earnings gap and the substantial increase in upward mobility over a career for women is the driving force behind the relative stability of overall mobility measures which mask declines in mobility among men. In contrast, overall inequality and mobility patterns are not significantly influenced by the changing size and structure of immigration nor by changes in the black/white earnings gaps.
Keywords: Inequality; Mobility; Social Security; Earnings Data
JEL Codes: D3; J3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| long-term mobility (J62) | overall earnings inequality (D31) |
| increase in upward mobility for women (J62) | relative stability in overall mobility measures (J62) |
| stability in long-term earnings mobility among all workers (J62) | declines in mobility among men (J62) |
| changes in mobility patterns (J62) | immigration size (F22) |
| changes in mobility patterns (J62) | black-white earnings gaps (J31) |
| earnings inequality (D31) | U-shape pattern (R14) |
| stability in long-term rank-based mobility (J62) | substantial heterogeneity across demographic groups (J79) |
| decrease in gender earnings gap (J79) | stability in long-term rank-based mobility (J62) |
| annual earnings inequality (D31) | longer-term earnings mobility (J62) |
| stability in long-term mobility (J62) | increase in annual earnings concentration (D33) |