2013 Update on the U.S. Earnings, Income, and Wealth Distributional Facts: A View from Macroeconomics

I nequality and potential policy responses to increasing inequality in the United States have recently become a hotly debated topic among policymakers, academics, and pundits of all sorts. In this article, we abstain from entering the debate about policy responses but rather provide a description of inequality in the United States in 2013 as measured by the Survey of Consumer Finances (SCF) to inform the ongoing debate. Essentially, we report, organize, and discuss a snapshot of inequality in 2013 in the United States. We contrast this situation with that of past SCF surveys that go back to 1989 in order to shed some light on the evolution of inequality over the last quarter century. In particular, we focus on the concentration of income and wealth in the hands of the richest households. As part of this discussion, we also provide some new evidence on the contribution of inheritance to the persistence of concentration across generations. Subsequently, we investigate which sources of income and which types of assets are the main contributors to inequality. By focusing on the SCF, which does not include data on time allocation or consumption, we must of necessity ignore how unequally people live, which is a relevant consequence of inequality in income or wealth. Because the SCF is not a panel that tracks people over time, we are not able to discuss the lifetime features of inequality.