Jobs and Income Growth of Top Earners and the Causes of Changing Income Inequality: Evidence from U.S. Tax Return Data Jon Bakija Adam Cole Bradley T. Heim Williams College Office of Tax Analysis Indiana University Williamstown, MA 01267 U.S. Department of Treasury School of Public and Environmental Affairs [email protected] Washington, DC 20220 Bloomington, IN 47405 [email protected] [email protected] April, 2012 Abstract: This paper presents summary statistics on the occupations of taxpayers in the top percentile of the national income distribution and fractiles thereof, as well as the patterns of real income growth between 1979 and 2005 for top earners in each occupation, based on information reported on U.S. individual income tax returns. The data demonstrate that executives, managers, supervisors, and financial professionals account for about 60 percent of the top 0.1 percent of income earners in recent years, and can account for 70 percent of the increase in the share of national income going to the top 0.1 percent of the income distribution between 1979 and 2005. During 1979-2005 there was substantial heterogeneity in growth rates of income for top earners across occupations, and significant divergence in incomes within occupations among people in the top 1 percent. We consider the implications for various competing explanations for the substantial changes in income inequality that have occurred in the U.S. in recent times. The views expressed are those of the authors and do not necessarily reflect those of the U.S. Department of the Treasury. A first draft of this paper was released March 2009, second draft was released October 2010. Econometric analysis of panel data included in previous drafts has been moved to a separate paper.
Jobs and Income Growth of Top Earners and the Causes of Changing Income Inequality: Evidence from U.S. Tax Return Data
Jul 04, 2023
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