- _____. 2008. “Changes in the Consumption, Income, and Well-Being of Single Mother Headed Families,†American Economic Review, 98(5), December, 2221-2241.
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- _____. “Rising Wage Inequality: The Role of Composition and Prices,†NBER working paper 11628, September 2005.
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- . 2003. “Measuring the Well-Being of the Poor Using Income and Consumption.†Journal of Human Resources, 38:S, 1180-1220.
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- . 2004. "The Effects of Welfare and Tax Reform: The Material Well-Being of Single Mothers in the 1980s and 1990s," Journal of Public Economics, 88, July, 1387-1420.
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- . 2006. "Consumption, Income, and Material Well-Being After Welfare Reform,†NBER Working Paper 11976.
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- After-Tax Money Income: adds to money income the value of tax credits such as the EITC, and subtracts state and federal income taxes and payroll taxes. Federal income tax liabilities and credits and FICA taxes are calculated for all years using TAXSIM (Feenberg and Coutts 1993). State taxes and credits are also calculated using TAXSIM for the years 1977-2005.
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- Aguiar, Mark, and Erik Hurst. 2007. “Measuring Trends in Leisure.†Quarterly Journal of Economics, 122(3): 969-1006.
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- Also, we do not observe whether a consumer unit resides in public or subsidized housing prior to 1982, so a rental equivalent value for those in such housing is not included in consumption prior to 1982. Estimates of the rental equivalent for those in public or subsidized housing in the mid-1980s are small relative to total consumption, suggesting that this exclusion is not likely to significantly bias our estimates for changes in inequality. Finally, the availability of information on vehicles also changes during our sample period as we noted above. C. Measures of Income in the CPS CPS respondents report annual measures of money income for the previous calendar year.
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Andreski, Patricia, Geng Li, Mehmet Zahid Samancioglu and Robert Schoeni. 2014. "Estimates of Annual Consumption Expenditures and Its Major Components in the PSID in Comparison to the CE." American Economic Review Papers and Proceedings, 104(5): 132-35.
Armour, Philip, Richard Burkhauser, and Jeff Larrimore (2014), “Levels and Trends in U.S. Income and its Distribution: A Crosswalk from Market Income towards a Comprehensive Haig-Simons Income Approach,†Southern Economic Journal, 81(2), 271–293.
- Assuming that desired health expenditures by those with few resources can be characterized by Cobb-Douglas preferences with a coefficient of 0.33 on health and 0.67 on other goods, only health expenditures up to one-third of total expenditures are included. This compromise values health coverage at cost for those with substantial resources as they likely spend less than one-third of consumption on health, but at much less than cost for those with few other resources. Because information on health insurance coverage is not available in 1960-1961, 1972-1973 and from 1984 to 1987, we do not report consumption measures that include health insurance for these years.
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Attanasio, Orazio & Davis, Steven J, 1996. "Relative Wage Movements and the Distribution of Consumption," Journal of Political Economy, University of Chicago Press, vol.
Attanasio, Orazio and Luigi Pistaferri (2014), “Consumption Inequality over the Last Half Century: Some Evidence Using the New PSID Consumption Measure,†American Economic Review: Papers & Proceedings 2014, 104(5): 122–126.
- Attanasio, Orazio P., Erich Battistin, and Andrew Leicester. 2006. “From Micro to Macro, from Poor to Rich: Consumption and Income in the UK and the US,†working paper, University College London.
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Attanasio, Orazio P., Erich Battistin, and Hidehiko Ichimura. 2007. "What Really Happened to Consumption Inequality in the United States?," in Hard-to-Measure Goods and Services: Essays in Honor of Zvi Griliches, edited by Ernst E. Berndt and Charles R. Hulten, National Bureau of Economic Research.
Attanasio, Orazio, Erik Hurst and Luigi Pistaferri. 2015. “The Evolution of Income, Consumption and Leisure Inequality in the US, 1980-2010.†in Improving the Measurement of Consumer Expenditures, Christopher Carroll, Thomas Crossley, and John Sabelhaus, editors. University of Chicago Press.
- Autor, David H, Lawrence F. Katz, and Melissa S. Kearney. “Trends in U.S. Wage Inequality: Re-Assessing the Revisionists,†Review of Economics and Statistics 90(2), May 2008, 300-323.
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- Bakija, Jon. 2008. “Documentation for a Comprehensive Historical U.S. Federal and State Income Tax Calculator Program.†Williams College working paper, January.
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- Battistin, E. (2003). ‘Errors in survey reports of consumption expenditures’, Institute for Fiscal Studies, Working Paper 0307.
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Bee, C. Adam, Bruce Meyer, and James Sullivan (2015), “The Validity of Consumption Data: Are the Consumer Expenditure Interview and Diary Surveys Informative?†in Improving the Measurement of Consumer Expenditures, Christopher Carroll, Thomas Crossley, and John Sabelhaus, editors. University of Chicago Press.
Blundell, Richard, Luigi Pistaferri & Ian Preston, 2008. "Consumption Inequality and Partial Insurance," American Economic Review, vol. 98(5), pages 1887-1921, December.
Bollinger, Christopher R. 1998. “Measurement Error in the Current Population Survey: A Nonparametric Look. Journal of Labor Economics 16:3, pp. 576-594.
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Burkhauser, Richard V., Feng, Shuaizhang, Jenkins, Stephen P. and Larrimore, Jeff (2011), “Estimating Trends in US Income Inequality Using the Current Population Survey: The Importance of Controlling for Censoring.†Journal of Economic Inequality, 9:393–415.
Burkhauser, Richard V., Shuaizhang Feng, and Stephen P. Jenkins. 2009. “Using the P90/P10 Index to Measure U.S. Inequality Trends with Current Population Survey Data: A View from Inside the Census Bureau Vaults.†Review of Income and Wealth 55, 166-185.
Campbell, J. and J. Cocco (2007). “How Do House Prices Affect Consumption? Evidence from Micro Data,†Journal of Monetary Economics, 54, 591–621.
Chulhee Lee, 2008. "Rising family income inequality in the United States, 1968-2000: impacts of changing labor supply, wages, and family structure," International Economic Journal, Korean International Economic Association, vol. 22(2), pages 253272.
- Citro, Constance F. and Robert T. Michael. 1995. Measuring Poverty: A New Approach, eds. Washington, D.C.: National Academy Press.
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- Cutler, David M. and Lawrence F. Katz. 1991. “Macroeconomic Performance and the Disadvantaged.†Brookings Papers on Economic Activity 2: 1-74.
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Czajka, John L. and Gabrielle Denmead. 2012. “Income Measurement for the 21st Century: Updating the Current Population Survey. Mathematica Policy Research.
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- Davies, Paul S. and T. Lynn Fisher. 2009. Measurement Issues Associated with Using Survey Data Matched with Administrative Data from the Social Security Administration, Social Security Bulletin, Vol. 69, No. 2: 1-12.
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Deaton, Angus & Paxson, Christina, 1994. "Intertemporal Choice and Inequality," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 437-67, June.
- Deaton, Angus. 1997. The Analysis of Household Surveys. Baltimore: Johns Hopkins Press.
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Deaton, Deaton & Christina Paxson, 2001. "Mortality, Income, and Income Inequality Over Time in Britain and The United States," Working Papers 267, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing.
- DeNavas-Walt, Carmen and Bernadette Proctor (2015), “Income and Poverty in the United States: 2014,†Current Population Reports, P60-252, September.
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- Each family, or what the CE refers to as the consumer unit, reports spending on a large number of expenditure categories for up to four consecutive quarters. We use data from the 1960-1961 and 1972-1973 surveys and all quarterly waves from the first quarter of 1980 through the third quarter of 1981 and from 1984 through 2014 (some of the fourth quarter of 2014 data comes from surveys conducted in the first quarter of 2015). The 1960-1961 surveys provide data on annual expenditures collected in a single interview, while the 19721973 surveys provide data on annualized expenditures collected from quarterly interviews.
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- Employer Contributions to Health Insurance: The Census imputes a value of health insurance for persons who were covered by an employer health insurance plan. Using data from the 1977 National Medical Care Expenditures Survey, the value of the employer contribution was imputed as a function of observable characteristics including earnings, fulltime /part-time, industry, occupation, sector, public/private, residence, and personal characteristics of the worker such as age, race, marital status, and education, and information on whether the employer paid all, part, or none of the cost of health insurance as reported in the supplement.
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- Expenditures: This summary measure includes all expenditures reported in the CE Interview Survey except miscellaneous expenditures and cash contributions because some of these expenditures are not collected in all interviews. Since 1980 a subset of miscellaneous expenditures has been collected only in the fifth interview, and cash contributions are only collected in the fifth interview for surveys conducted from the first quarter of 1980 through the first quarter of 2001.
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Feenberg, Daniel and Elisabeth Coutts. 1993. "An Introduction to the TAXSIM Model", Journal of Policy Analysis and Management, 12(1): 189-94. http://www.nber.org/~taxsim/.
Fisher, J., Johnson, D. S. and Smeeding, T. M. (2014), Inequality of Income and Consumption in the U.S.: Measuring the Trends in Inequality from 1984 to 2011 for the Same Individuals. Review of Income and Wealth. doi: 10.1111/roiw.12129.
- For our analysis of after-tax income, Federal income tax liabilities and credits and FICA taxes are calculated for all years using TAXSIM (Feenberg and Coutts 1993). State taxes and credits are also calculated using TAXSIM for the years 1977-2014. Prior to 1977 we calculate state taxes using IncTaxCalc (Bakija, 2008). We confirm that in 1977 net state tax liabilities generated using IncTaxCalc match very closely those generated using TAXSIM.15 All expenditure and consumption data come from the Interview component of the Consumer Expenditure (CE) Survey. The CE provides annual or annualized data for 13,728 families in 1960-1961 and 19,975 families in 1972-1973. From 1980-2011 the survey is a rotating panel that includes about 5,000 families each quarter until 1998 and about 7,500 families thereafter.
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- Garner, Thesia I., George Janini, William Passero, Laura Paszkiewicz, and Mark Vendemia. 2006. “The Consumer Expenditure Survey: A Comparison with Personal Consumption Expenditures,†working paper, Bureau of Labor Statistics.
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- General Accounting Office. 1996. “Alternative Poverty Measures,†GAO/GGD-96-183R. Washington, DC: Government Printing Office.
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- Gieseman, Raymond. 1987. “The Consumer Expenditure Survey: quality control by comparative analysis,†Monthly Labor Review, 8-14.
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- Gordon, Robert J. and Ian Dew-Becker. 2006. Controversies about the Rise of American Inequality: A Survey, NBER Working Paper No. 13982.
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Gottchalk, Peter and Sheldon Danziger. 2005. "Inequality of Wage Rates, Earnings and Family Income in the United States, 1975-2002." Review of Income and Wealth 51, pp. 231-254.
Gottchalk, Peter and Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
Guvenen, Fatih and Greg Kaplan, 2017. “Top Income Inequality in the 21st Century: Some Cautionary Notes.†Working Paper, University of Chicago.
- Haider, Steven J., and Kathleen M. McGarry. 2006. “Recent Trends in Resource Sharing among the Poor,†Working and Poor: How Economic and Policy Changes Are Affecting Low-Wage Workers (eds., Rebecca Blank, Sheldon Danziger, and Robert Schoeni), Russell Sage Press.
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Heathcote, Jonathan, Fabrizio Perri, and Giovanni L. Violante. 2010. “Unequal we stand: An empirical analysis of economic inequality in the United States, 1967–2006,†Review of Economic Dynamics, 13:1, 15-51.
- Housing Subsidies: The Census imputes a value of housing subsidies for households that report living in public housing or receiving a public rent subsidy. The value of the subsidy is calculated as follows. Using data from the 1985 American Housing Survey (AHS), reported rent for unsubsidized two-bedroom housing units is regressed on housing characteristics.
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Jencks, Christopher, Susan E. Mayer, and Joseph Swingle. 2004b. “Who Has Benefitted from Economic Growth in the United States Since 1969? The Case of Children.†in Edward N. Wolff, ed. What Has Happened to the Quality of Live in the Advanced Industrial Nations? Cheltenham, UK: Edward Elgar.
Juhn, Chinhui, Kevin M. Murphy and Brooks Pierce, "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, 101 (3), June 1993, 410-442.
Kiel, Katherine A. and Jeffrey E. Zabel. 1999. “The Accuracy of Owner-Provided House Values: the 1978-1991 American Housing Survey†Real Estate Economics 27(2): 263298. 37 Krueger, Dirk and Fabrizio Perri. "Does Income Inequality Lead To Consumption Inequality? Evidence and Theory," Review of Economic Studies, 2006, v73(1, Jan), 163-193.
Krueger, Dirk and Fabrizio Perri, 2003. "On the Welfare Consequences of the Increase in Inequality in the United States," NBER Working Papers 9993, National Bureau of Economic Research, Inc.
Melly, Blaise. 2005. “Decomposition of Differences in Distribution Using Quantile Regression.†Labour Economics 12 (2005) 577–590.
Meyer, Bruce D. and James X. Sullivan. 2011. “Further Results on Measuring the WellBeing of the Poor Using Income and Consumption,†Canadian Journal of Economics.
Meyer, Bruce D. and James X. Sullivan. 2012a. “Identifying the Disadvantaged: Official Poverty, Consumption Poverty, and the New Supplemental Poverty Measure,†Journal of Economic Perspectives, Summer 2012, 111-136.
- Meyer, Bruce D. and James X. Sullivan. 2012b. “Winning the War: Poverty from the Great Society to the Great Recession,†Brookings Papers on Economic Activity, Fall, p. 133183.
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Meyer, Bruce D. and Nikolas Mittag. 2015. “Using Linked Survey and Administrative Data to Better Measure Income: Implications for Poverty, Program Effectiveness and Holes in the Safety Net,†NBER Working Paper 21676, October.
- Meyer, Bruce D., Robert M. Goerge, and Nikolas Mittag. 2014. “The Analysis of Food Stamp Program Participation with Matched Administrative and Survey Data.†Working Paper, Harris School, University of Chicago.
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Meyer, Bruce D., Wallace K. C. Mok and James X. Sullivan. 2015. “Household Surveys Household Surveys in Crisis," Journal of Economic Perspectives, Fall 2015, 29(4), pp. 199-226.
Mian, Atif, Amir Sufi, and Kamalesh Rao, (2013), “Household Balance Sheets, Consumption, and the Economic Slump,†Quarterly Journal of Economics, 1687-1726 Moretti, Enrico, 2008. "Real Wage Inequality," NBER Working Papers 14370, National Bureau of Economic Research, Inc.
Piketty, T. and E. Saez (2003). Income inequality in the United States: 1913-1998. Quarterly Journal of Economics, 118(1), 1-39.
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Poterba, James M. 1991. “Is the Gasoline Tax Regressive?†In Tax Policy and the Economy 5, ed. David Bradford, 145-164. Cambridge, MA: MIT Press.
- Sabelhaus, John, David Johnson, Stephen Ash, David Swanson, Thesis Garner, John Greenlees and Steve Henderson. 2015. “Is the Consumer Expenditure Survey Representative by Income?†In Improving the Measurement of Consumer Expenditures. University of Chicago Press.
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- Short, Kathleen and Amy O’Hara (2008), “Valuing Housing in Measures of Household and Family Economic Well-Being,†working paper, U.S. Census Bureau.
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Skinner, Jonathan S. and Zhou, Weiping, The Measurement and Evolution of Health Inequality: Evidence from the U.S. Medicare Population (October 2004). NBER Working Paper No. W10842.
Slesnick, Daniel T, (1994), Consumption, Needs and Inequality, International Economic Review, 35, issue 3, p. 677-703.
Slesnick, Daniel T. 1992. “Aggregate Consumption and Savings in the Postwar United States.†Review of Economics and Statistics 74(4): 585-597.
Slesnick, Daniel T. 1993. “Gaining Ground: Poverty in the Postwar United States.†Journal of Political Economy 101(1): 1-38.
Slesnick, Daniel T. 2001. Consumption and Social Welfare. Cambridge: Cambridge University Press.
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- Table 3: Total Consumption Elasticities of Well-Measured Consumption Model Sample Restriction Year and Sample Size Independent Variable None 1980, N= 19,073 Log Total Consumption 0.928 1.169 (0.001) (0.001) 1988, N= 20,294 Log Total Consumption 0.810 0.967 (0.005) (0.008) 1980, N= 14,531 Log Total Consumption 0.944 1.167 (0.001) (0.002) 1988, N= 15,596 Log Total Consumption 0.829 0.997 (0.009) (0.013) Dependent Variable Notes: All data are from the Consumer Expenditure Interview Survey. Wellmeasured consumption includes spending on food at home, rent (for renters), rental equivalent (for homeowners or those in government or subsidized housing), utilities, service flows from owned vehicles, and spending on gasoline and motor oil. Income and consumption are adjusted for differences in family size using the NAS recommended equivalence scale.
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- This approach will understate total automobile flows for some families because the number of automobiles is topcoded at 2. This approach will overstate vehicle flows for families that dispose of an automobile during the survey year if this automobile is included in the total count of automobiles owned. This approach will also overstate vehicle flows for families that have owned their vehicles for an extended time, because we are predicting the value based on recent automobile purchases. Note that unlike our approach for 1980-2014, we calculate service flows only for automobiles, not for other vehicles such as trucks, motorcycles, campers, etc., because we do not have reliable information on the total number of each of these types of vehicles owned.
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- Total Consumption: Consumption includes all spending in our measure of total expenditures less spending on out of pocket health care expenses, education, and payments to retirement accounts, pension plans, and social security. In addition, housing and vehicle expenditures are converted to service flows. For homeowners we subtract spending on mortgage interest, property taxes, maintenance, repairs, insurance, and other expenses, and add the reported rental equivalent of the home. For years when the rental equivalent is not reported (1960-1961 and 1980-1981 surveys), we impute a value as explained below. For those in public or subsidized housing, we impute a rental value using the procedure outlined below. For vehicle owners we subtract spending on recent purchases of new and used vehicles as well vehicle finance charges. We then added the service flow value of all vehicles owned by the family, as described below.
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- U.S. Bureau of Labor Statistics (BLS). 1997. “Consumer Expenditures and Income,†in BLS Handbook of Methods, U.S. Department of Labor, U.S. Department of Labor.
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- U.S. Bureau of Labor Statistics (BLS). 2005. “Expenditures on Food from the Consumer Expenditure Survey,†unpublished manuscript.
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- U.S. Bureau of Labor Statistics (BLS). 2016. “Consumer Price Index,†https://www.bls.gov/cpi/.
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- U.S. Census Bureau. 2015 American Community Survey Research and Evaluation Report, Center for Administrative Records Research and Applications Memorandum Series #16-7.
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- U.S. Census Bureau. various year-a. “Income, Poverty, and Health Insurance Coverage in the United States: 2011.†Current Population Report P-60-243, Washington D.C., Department of Commerce. U.S. Census Bureau. various years-b. “Measuring the Effects of Benefits and Taxes on Income and Poverty.†Current Population Reports, Washington D.C., Department of Commerce.
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- We follow a similar procedure to impute rental equivalent for the 1960-61 sample, except we estimate the coefficients in Equation A.1 using the 1972-73 CE Survey. Also, the 1960s surveys provide information on the range within which the value of the home falls, rather than a continuous value. So when estimating Equation A.1 using the 1972-73 surveys, we map the reported value of the home into the same ranges (in real terms) as are available in the 1960-61 surveys, and then include indicator variables for these home value ranges in place of the reported home value (hval).
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