The Cyclical Response of U.S. Income Inequality: some new Empirical Results

Abstract

This article tests the hypothesis that inequality in the personal distribution of income as measured by the Gini coefficient is related to cyclical economic activity and a secular time trend for the 1947-1973 period in the United States. New empirical results are obtained by utilizing time-series regression analysis on disaggregated population subgroups for male individuals classified by race, age, and occupation. The empirical results indicate that statistically significant links between income inequality and macroeconomic activity do exist in the U.S. economy, and particularly strong support is found for apositive influence of unemployment on inequality in the distribution of income.