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Title:Top incomes, rising inequality, and welfare PDF Logo
Authors:Lansing, Kevin J.
Markiewicz, Agnieszka
Issue Date:2012
Series/Report no.:CESifo Working Paper: Fiscal Policy, Macroeconomics and Growth 3984
Abstract:This paper develops a general-equilibrium model of skill-biased technological change that approximates the observed shifts in the shares of wage and non-wage income going to the top decile of U.S. households since 1980. Under realistic assumptions, we find that all agents can benefit from the technology change, provided that the observed rise in redistributive transfers over this period is taken into account. We show that the increase in capital's share of total income and the presence of capital-entrepreneurial skill complementarity are two key features that help support the wages of ordinary workers as the new technology diffuses.
Subjects:income inequality
skill-biased technological change
capital-skill complementarity
redistribution
welfare
JEL:E32
E44
H23
O33
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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