Levels and long-term trends in earnings inequality: Overcoming current population survey censoring problems using the GB2 distribution

Shuaizhang Feng, Richard V. Burkhauser, J. S. Butler

Research output: Contribution to journalReview articlepeer-review

31 Scopus citations

Abstract

Over its history, the March Current Population Survey (CPS) has increasingly captured the upper tail of the distribution of all sources of income. This, together with time-consistency problems in top coding, means that users of both the public-use and restricted-access CPS will understate the level of wage earnings and income inequality in earlier years and overstate their growth over time. We address this problem by modeling the personal earnings of full-time, full-year workers using the generalized beta distribution of the second kind, calculating Gini coefficients from the estimated parameters, and comparing them with past findings.

Original languageEnglish
Pages (from-to)57-62
Number of pages6
JournalJournal of Business and Economic Statistics
Volume24
Issue number1
DOIs
StatePublished - Jan 2006

Bibliographical note

Funding Information:
Partial funding for the work reported in this article came from the U.S. Department of Education, National Institute of Disability and Rehabilitation Research, cooperative agreement 1331390038. This work does not necessarily reflect the views of the National Institute of Disability and Rehabilitation Research. The authors thank Kenneth A. Couch, Andrew J. Houtenville, Yingyao Hu, Dean R. Lillard, and Francesca Molinari for comments on earlier versions. They also gratefully acknowledge comments from an anonymous referee, which led to considerable improvements of this article.

Keywords

  • Current Population Survey
  • Gini values
  • Inequality measurement
  • Time consistency

ASJC Scopus subject areas

  • Statistics and Probability
  • Social Sciences (miscellaneous)
  • Economics and Econometrics
  • Statistics, Probability and Uncertainty

Fingerprint

Dive into the research topics of 'Levels and long-term trends in earnings inequality: Overcoming current population survey censoring problems using the GB2 distribution'. Together they form a unique fingerprint.

Cite this