Fed Working Paper Says Wealth Inequality Is Overstated

Even though it’s clear that income and wealth inequality have increased in the US, it’s hard to pin down the extent of the change. There are conceptual differences about what should be included (eg employer-provided health care), but even when you agree on terms there are problems getting a decent measurement. As non-traditional types of income become more important, the uncertainty gets even worse.

“Although the administrative tax data makes it possible to show that top share families are getting increasingly large slices of a particular pie, the overall size of the pie being measured in those data is shrinking relative to more economically-meaningful concepts of income and wealth,” write Jesse Bricker, Alice Henriques, Jake Krimmel and John Sabelhaus in...