Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/243193 
Year of Publication: 
2021
Series/Report no.: 
DIW Discussion Papers No. 1964
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
Using a wide variety of business cycle dating and filtering techniques, this paper documents the cyclical behavior of the post-tax income distribution in the US. First, all incomes are cyclical and co-move with the business cycle. Second, lower and higher income individuals experience significantly larger fluctuations across the business cycle than middle-income individuals. Third, these fluctuations have become smaller over the course of the Great Moderation for the bottom and the very top income individuals. With the financial crisis starting in 2009 and its repercussions, the volatilities are again increasing; however, not significantly. These findings are independent from the method to extract the business cycle component.
Subjects: 
cyclicity of the income distribution
business cycle
JEL: 
E01
E32
D31
Document Type: 
Working Paper

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