Tuesday, January 17, 2012

Krueger on Income Inequality and Mobility

Alan Krueger, the current Chairman of the President's Council of Economic Advisors gave a speech at the Center for American Progress recently entitled "The Rise and Consequences of Inequality in the United States."  Krueger, the Princeton economics professor knows a lot about what he speaks having himself done a lot of seminal work in labor economics.  Here is the text of the speechHere are the charts that go along with the speech.

There are a number of interesting charts - familiar to those who keep tabs on this stuff, but of interest to those who don't - here are two that I thought were particularly instructive.

The first examines the correlation between income inequality and intergenerational earnings mobility and finds that the US is high in terms of inequality and low in terms of mobility (a high elasticity means that incomes are closely related across generations).

The second is the relative inequality (high) and how the US tax code addresses the inequality (less progressive) than a number of other comparison countries.  Germany, for example, has higher pre-tax inequality (blue) than the US, but much lower post-tax inequality (red) than the US.  

Germany's economy, by the way, has been the real superstar of this current economic downturn.

1 comment:

Unknown said...

The gini coefficient is a terrible way to try to understand "inequality".