A look at long-term developments in the distribution of income

Developments in the distribution of income have received much attention over the past decade. Several analysts have argued that income gains have gone almost exclusively to the highest paid 20 percent of the population, leaving no gains to the remaining 80 percent. ; Joseph H. Haslag and Lori L. Taylor examine developments in income inequality over the past forty years and estimate which factors account for these changes over time. While some researchers have found that income distribution became more equal during the 1950s and 1960s and then less equal after the mid-1970s, Haslag and Taylor find evidence that an upward trend in income inequality has been occurring since the early 1950s. They also find that movements in the income inequality measure are mostly determined by persistence; that is, income inequality adjusts gradually. Demographic features account for nearly 25 percent of the variation in income inequality, while policy actions explain less than 15 percent.Income distribution