Journal of Economic Perspectives—Volume 34, Number 4—Fall 2020—Pages 3–26
The Rise of Income and Wealth Inequality in America: Evidence from Distributional Macroeconomic Accounts Emmanuel Saez and Gabriel Zucman
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or the measurement of income and wealth inequality, there is no equivalent to Gross Domestic Product statistics—that is, no government-run standardized, documented, continually updated, and broadly recognized methodology similar to the national accounts which are the basis for GDP. Starting in the mid2010s, we have worked along with our colleagues from the World Inequality Lab to address this shortcoming by developing “distributional national accounts”— statistics that provide consistent estimates of inequality capturing 100 percent of the amount of national income and household wealth recorded in the official national accounts. This effort is motivated by the large and growing gap between the income recorded in the datasets traditionally used to study inequality—household surveys, income tax returns—and the amount of national income recorded in the national accounts. The fraction of national income that is reported in individual income tax data has declined from 70 percent in the late 1970s to about 60 percent in 2018. The gap is larger in survey data, such as the Current Population Survey, which do not capture top incomes well. This gap makes it hard to address questions such as: What fraction of national income is earned by the bottom 50 percent, the middle 40 percent, and the top 10 percent of the distribution? Who has benefited from economic growth since the 1980s? How does the growth experience of the
■ Emmanuel Saez and Gabriel Zucman are Professors of Economics, both at the University
of California, Berkeley, California. Their email addresses are saez@econ.berkeley.edu and zucman@berkeley.edu. For supplementary materials such as appendices, datasets, and author disclosure statements, see the article page at https://doi.org/10.1257/jep.34.4.3.