Академический Документы
Профессиональный Документы
Культура Документы
Edward N. Wolff New York University, NBER, and Levy Economics Institute Ajit Zacharias The Levy Economics Institute For Presentation at the 2008 World Congress on National Accounts and Economic Performance for Nations
Summary of Findings
1. We analyze well-being in the US from 1983 to 2001 using the standard measure, gross money income, and one in which income from wealth is calculated as the sum of lifetime annuity from nonhome wealth and imputed rental-equivalent for owner-occupied homes. 2. Over this period, median well-being increases faster when these adjustments are made than when money income is used. 3. This adjustment also widens the income gap between African-Americans and whites but increases the relative well-being of the elderly.
Summary (continued)
4. Adding imputed rent and annuities from household wealth to household income considerably increases measured inequality and the share of income from wealth in inequality.
5. However, both measures show about the same rise in inequality over the period. 6. Our results also give little support to the assertion that the working rich has replaced rentiers at the top of the economic ladder.
Outline of paper
1. Summarize previous attempts to incorporate wealth into a measure of well-being. 2. Describe the main sources of data and concepts of wealth used in the study. 3. Discuss how we incorporate wealth into a combined income-net worth measure. 4. Show results for all households and sub-groups.
Outline (continued)
5. Compare our estimates of top income shares and those of Piketty and Saez (2003) to assess whether rentiers were at the top of the economic ladder during this period.
SOME MOTIVATION
Consider two individuals A and B. A buys a bond at par value and receives only interest income. B buys the bond at a discount with the SAME yield and receives only capital gains. In NIPA only interest included in personal income but A and B are EQUALLY well-off in terms of wellbeing. (Also compare stocks with same yield but different mix of dividends and capital gains).
Figure 1. Ratio of Mean Income to the Mean Income of Non-Hispanic Whites by Race/Ethnicity and Income Definition, 1983 and 2001
1.20
1.00
Ratio
0.60
0.40
0.20
Figure 2. The Ratio of Mean Income to the Overall Mean by Age and Income Definition,1983 and 2001
1.60
1.40
1.20
0.80
0.60
0.40
0.20
Table 2 Economic Inequality by Income Measure (Gini coefficients) Change Income Definition 1983 1989 1995 2001 1983-2001 Money income 0.456 0.533 0.545 0.549 0.093 Wealth-adjusted income 0.493 0.556 0.562 0.589 0.096 Memo items: Net worth 0.798 0.814 0.823 0.827 0.029
Table 3. Income shares of families in aggregate income (in percent) 1983 2001 Wealth-adjusted Wealth-adjusted Money income income Money income income P0-25 5.7 5.3 4.2 3.7 P25-50 14.0 13.0 11.4 9.9 P50-90 46.9 43.6 41.4 38.3 P90-100 33.4 38.1 42.9 48.1 P90-95 10.7 10.3 10.2 10.5 P95-99 12.9 13.7 15.3 17.5 P99-100 9.9 14.1 17.4 20.1
Figure 3. Percent change in money income MI and wealth-adjusted income WI, 1983-2001
70.0
60.0
50.0
Percentage Change, 1983-2001
40.0
30.0
20.0
10.0
Table 4 Percentage Composition of income by income definition Money income (MI) All P40-P60 P90-95 P95-99 P99-100 A. 1983 Wages and Salaries 63.6 72.0 62.8 55.6 30.1 Self-employment Income 13.3 6.1 18.6 22.8 35.9 Income from Wealth 10.3 6.2 12.7 15.0 29.5 Other Income 12.8 15.7 5.8 6.5 4.5 Total Income 100.0 100.0 100.0 100.0 100.0
Table 4 Percentage Composition of income by income definition Money income (MI) All P40-P60 P90-95 P95-99 P99-100 B. 2001 Wages and Salaries 74.1 78.7 82.8 66.3 59.2 Self-employment Income 9.7 1.5 6.1 17.8 26.7 Income from Wealth 7.2 3.9 6.9 13.6 13.0 Other Income 9.0 15.9 4.2 2.3 1.1 Total Income 100.0 100.0 100.0 100.0 100.0
Table 4 Percentage Composition of income by income definition Wealth-adjusted income (WI) All P40-P60 P90-95 P95-99 A. 1983 Wages and Salaries 53.7 69.0 59.8 35.1 Self-employment Income 11.2 4.5 11.7 24.3 Income from Wealth 24.3 12.2 21.6 36.6 Other Income 10.8 14.3 6.8 4.0 Total Income 100.0 100.0 100.0 100.0
Table 4 Percentage Composition of income by income definition Wealth-adjusted income (WI) All P40-P60 P90-95 P95-99 B. 2001 Wages and Salaries 57.1 74.4 61.6 41.0 Self-employment Income 7.4 1.5 6.0 11.3 Income from Wealth 28.6 12.3 28.6 44.6 Other Income 7.0 11.7 3.8 3.1 Total Income 100.0 100.0 100.0 100.0
Table 5 Share of Income from Wealth in Total Income, 198 P90-95 P95-99 P99-100 1982 2000 1982 2000 1982 2000 PS 8 4 13 7 29 12 MI 13 7 15 14 30 13 WI 22 29 36 45 61 46