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Economic Quarterly

Spring 2008

On the Evolution of Income Inequality in the United States

Kevin A. Bryan and Leonardo Martinez

This article discusses the evolution of income inequality in the United States. We focus mainly on the evolution of inequality since the 1960s because more data are available for this period than for earlier periods. We document that income inequality rose in the United States during the period under study. Furthermore, our article documents periods characterized by a decline in real income for lower income groups. We show that the increase in inequality is concentrated among individuals with higher income and we explain that welfare inequality may have increased less than income inequality (and, in fact, may actually have decreased). In addition, this article summarizes the findings of studies on inequality trends between the 1820s and the 1960s. We show that the recent period of increasing inequality followed a period of decreasing inequality since World War I, which in turn followed a period of increasing inequality in the 19th century.

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