ABSTRACT. The discussion about rising income inequality has jumped out of academic journals and has become a regular part of public discourse, especially in the speeches of the candidates running for their party’s nomination for president. One of the major new findings comes from a report from Emanuel Saez that argues that most of the economic growth since 2009 was captured by the top one percent of the income ladder. This paper shows the Saez’s results are very sensitive to the starting year; if he tracked incomes from 2007 (the last business cycle peak), then the top one percent would be income losers and responsible for a disproportion share of all income losses. Further, data from the Congressional Budget Office shows that the real after-tax incomes of the bottom 95 percent declined minimally (1–2 percent) from 2007 to 2011 while the incomes of the top one percent fell by 27 percent and that the after-tax income Gini coefficient was higher in 2007 than in 2011. pp. 16–26
JEL codes: O15; P24; P44; D31; E64

Keywords: income inequality; after-tax incomes; income transfers; Emanuel Saez; Congressional Budget Office; Gini coefficient

How to cite: Rose, Stephen J. (2016), “Income Changes during the Great Recession and the Recovery,” Journal of Self-Governance and Management Economics 4(4): 16–26.

Received 3 August 2015 • Received in revised form 26 January 2016
Accepted 26 January 2016 • Available online 15 February 2016


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George Washington University;
The Urban Institute, Washington, D.C.

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