The growth of US top income inequality: A hierarchical redistribution hypothesis

Arbeitspapier

What 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 dividends 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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Papers on Capital as Power ; No. 2018/05

Classification and Topics

• Classification: Wirtschaft ; Personal Income, Wealth, and Their Distributions ; Factor Income Distribution
• Subject: top income share ; inequality ; hierarchy ; power ; functional income distribution ; personal income distribution

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fix, Blair
• Event: Veröffentlichung
• (who): Forum on Capital As Power - Toward a New Cosmology of Capitalism
• (where): s.l.
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/181037
• Last update: 10.03.2025, 11:46 AM CET