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

dc.contributor.authorFix, Blair
dc.date.accessioned2022-11-01T23:11:34Z
dc.date.available2022-11-01T23:11:34Z
dc.date.issued2018
dc.descriptionfunctional income distribution hierarchy inequality personal income distribution power top income share
dc.description.abstractWhat 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.
dc.identifier.citationThe 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).
dc.identifier.urihttp://hdl.handle.net/10315/39916
dc.titleThe Growth of US Top Income Inequality: A Hierarchical Redistribution Hypothesis
dc.typeWorking Paper

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