The Trend in Inequality Among Families, Individuals, and Workers in the United States

A Twenty-Five-Year Perspective

by Lynn A. Karoly

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This report analyzes changes in the distribution of income in the United States over the last 25 years. In an effort to explain contradictory findings in previous research, it uses microdata from the Current Population Survey to examine how the distribution of income and wages has changed for families, individuals, and workers. The author also compares her findings with those of previous studies in an attempt to resolve the controversies in the literature. This study presents a serious challenge to the conventional wisdom that there is a relatively stable income distribution in the United States. In the last two decades, income inequality has been increasing, both among families and individuals, and among workers. Although the magnitude of the changes in the income distribution and the timing of the changes can depend upon how income and inequality are measured, the net result is that the gap in family income and wages between those at the top of the income or wage scale and those at the bottom has widened, at least since the mid-1970s. These changes in the U.S. income distribution are indicative of more fundamental changes in the composition of families and workers, and in the structure of the economy.

This report is part of the RAND Corporation Report series. The report was a product of the RAND Corporation from 1948 to 1993 that represented the principal publication documenting and transmitting RAND's major research findings and final research.

This research in the public interest was supported by RAND, using discretionary funds made possible by the generosity of RAND's donors, the fees earned on client-funded research, and independent research and development (IR&D) funds provided by the Department of Defense.

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