The Growth of US Top Income Inequality: A Hierarchical Redistribution Hypothesis

The Growth of US Top Income Inequality: A Hierarchical Redistribution Hypothesis
Fix, Blair. (2018). Working Papers on Capital as Power. No. 2018/05. July. pp. 1-56. (Article - Working Paper; English).

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Alternative Locations

http://www.capitalaspower.com/2018/07/2018-05-fix-the-growth-of-us-top-income-inequality/, https://www.econstor.eu/handle/10419/181037

Abstract or Brief Description

What accounts for the growth of US top income inequality? This paper proposes a hierarchical redistribution hypothesis. The idea is that US firms have systematically redistributed income to the top of the corporate hierarchy. I test this hypothesis using a large-scale hierarchy model of the US private sector. My method is to vary the rate that income scales with hierarchical rank within modeled firms. I find that this model is able to reproduce four intercorrelated US trends: (1) the growth of the top 1% income share; (2) the growth of the CEO pay ratio; (3) the growth of the dividend share of national income; and (4) the ‘fattening’ of the entire income distribution tail. This result supports the hierarchical redistribution hypothesis. It is also consistent with the available empirical evidence on within-firm income redistribution.

Language

English

Publication Type

Article - Working Paper

Keywords

functional income distribution hierarchy inequality personal income distribution power top income share

Subject

BN Methodology
BN Power
BN Region - North America
BN Business Enterprise
BN Data & Statistics
BN Distribution
BN Industrial Organization
BN Institutions

Depositing User

Jonathan Nitzan

Date Deposited

02 Aug 2018 22:28

Last Modified

11 Aug 2018 00:12

URL:

http://bnarchives.yorku.ca/id/eprint/547

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