Growing economic disparity in the US : assessing the problem and the policy options
Distributional changes in the U.S. in recent decades represent a fundamental shift in the allocation of economic resources as both income and wage disparities have widened and the level of real income and earnings at the bottom of the scale has declined. This paper provides an overview of the recent trends in income inequality in the U.S., reviews the factors that are behind the significant distributional changes, and provides a menu of policy options for addressing the new inequality. The analysis focuses on a series of possible policy objectives in light of the nature of the distributional shifts, and a framework for thinking about the range of policy options available given those objectives. Options include reliance on macroeconomic and fiscal policies, as well as initiatives targeting labor markets, human capital investments and family decisionmaking.
Originally published in: The Inequality Paradox: Growth of Income Disparity, James A. Auerbach and Richard S. Belous, eds., Washington, D.C.: National Policy Association, 1998, pp. 239-259.
This report is part of the RAND Corporation Reprint series. The Reprint was a product of the RAND Corporation from 1992 to 2011 that represented previously published journal articles, book chapters, and reports with the permission of the publisher. RAND reprints were formally reviewed in accordance with the publisher's editorial policy and compliant with RAND's rigorous quality assurance standards for quality and objectivity. For select current RAND journal articles, see External Publications.
This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.