Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/181037
Authors: 
Fix, Blair
Year of Publication: 
2018
Series/Report no.: 
Working Papers on Capital as Power 2018/05
Abstract: 
What accounts for the growth of US top income inequality? This paper proposes a hierarchical redistribution hypothesis. The idea is that US firms have systematically redistributed income to the top of the corporate hierarchy. I test this hypothesis using a large scale hierarchy model of the US private sector. My method is to vary the rate that income scales with hierarchical rank within modeled firms. I find that this model is able to reproduce four intercorrelated US trends: (1) the growth of the top 1% income share; (2) the growth of the CEO pay ratio; (3) the growth of the dividends share of national income; and (4) the "fattening" of the entire income distribution tail. This result supports the hierarchical redistribution hypothesis. It is also consistent with the available empirical evidence on within-firm income redistribution.
Subjects: 
top income share
inequality
hierarchy
power
functional income distribution
personal income distribution
JEL: 
B5
C5
D31
D33
URL of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by-nc-nd/4.0/
Document Type: 
Working Paper
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