Cross-sectional facts for macroeconomists

Dirk Krueger, Fabrizio Perri, Luigi Pistaferri, Giovanni L. Violante

    Research output: Contribution to journalArticle

    Abstract

    This article provides an introduction to the special issue of the Review of Economic Dynamics on "Cross-Sectional Facts for Macroeconomists". The issue documents, for nine countries, the level and the evolution, over time and over the life cycle, of several dimensions of economic inequality, including wages, labor earnings, income, consumption, and wealth. After describing the motivation and the common methodology underlying this empirical project, we discuss selected results, with an emphasis on cross-country comparisons. Most, but not all, countries experienced substantial increases in wages and earnings inequality, over the last three decades. While the trend in the skill premium differed widely across countries, the experience premium rose and the gender premium fell virtually everywhere. At a higher frequency, earnings inequality appears to be strongly counter-cyclical. In all countries, government redistribution through taxes and transfers reduced the level, the trend and the cyclical fluctuations in income inequality. The rise in income inequality was stronger at the bottom of the distribution. Consumption inequality increased less than disposable income inequality, and tracked the latter much more closely at the top than at the bottom of the distribution. Measuring the age-profile of inequality is challenging because of the interplay of time and cohort effects.

    Original languageEnglish (US)
    Pages (from-to)1-14
    Number of pages14
    JournalReview of Economic Dynamics
    Volume13
    Issue number1
    DOIs
    StatePublished - Jan 2010

    Fingerprint

    Income inequality
    Earnings inequality
    Premium
    Skill premium
    Government
    Cross-country comparison
    Redistribution
    Tax
    Economic dynamics
    Life cycle
    Cohort effect
    Income
    Wealth
    Consumption inequality
    Wages
    Economic inequality
    Methodology
    Labor
    Wage inequality
    Fluctuations

    Keywords

    • Consumption
    • Estimation of earnings dynamics
    • Government redistribution
    • Income
    • Inequality over the business cycle
    • Life-cycle inequality
    • Long-run trends in inequality
    • Wages
    • Wealth

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    Krueger, D., Perri, F., Pistaferri, L., & Violante, G. L. (2010). Cross-sectional facts for macroeconomists. Review of Economic Dynamics, 13(1), 1-14. https://doi.org/10.1016/j.red.2009.12.001

    Cross-sectional facts for macroeconomists. / Krueger, Dirk; Perri, Fabrizio; Pistaferri, Luigi; Violante, Giovanni L.

    In: Review of Economic Dynamics, Vol. 13, No. 1, 01.2010, p. 1-14.

    Research output: Contribution to journalArticle

    Krueger, D, Perri, F, Pistaferri, L & Violante, GL 2010, 'Cross-sectional facts for macroeconomists', Review of Economic Dynamics, vol. 13, no. 1, pp. 1-14. https://doi.org/10.1016/j.red.2009.12.001
    Krueger, Dirk ; Perri, Fabrizio ; Pistaferri, Luigi ; Violante, Giovanni L. / Cross-sectional facts for macroeconomists. In: Review of Economic Dynamics. 2010 ; Vol. 13, No. 1. pp. 1-14.
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