PT - JOURNAL ARTICLE
AU - Jonathan Fisher
AU - David Johnson
AU - Jonathan P. Latner
AU - Timothy Smeeding
AU - Jeffrey Thompson
TI - Inequality and Mobility Using Income, Consumption, and Wealth for the Same Individuals
AID - 10.7758/RSF.2016.2.6.03
DP - 2016 Oct 01
TA - RSF: The Russell Sage Foundation Journal of the Social Sciences
PG - 44--58
VI - 2
IP - 6
4099 - http://www.rsfjournal.org/content/2/6/44.short
4100 - http://www.rsfjournal.org/content/2/6/44.full
AB - Recent studies of economic inequality almost always separately examine income inequality, consumption inequality, and wealth inequality, and hence, these studies miss the important synergy between the three measures explicit in the life-cycle budget constraint. Using the Panel Study of Income Dynamics (PSID), we study inequality in three dimensions, focusing on the conjoint distributions of income, consumption, and wealth for the same individuals. We find that the trends in inequality in income, consumption, and wealth similarly increase between 1999 and 2013. We examine the pairwise distributions of our measures using the average propensity to consume and the wealth-income ratios. Using the longitudinal nature of the PSID, we follow people over this period and find mobility is similar using income, consumption, and wealth. We conclude that while all three types of inequality are rising, wealth increasingly acts as a buffer to cushion income changes, which could reduce mobilityâ€”both intra- and inter-generational mobility.