Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

AI Summary. The authors find that rising income dispersion among workers at age 25 accounts for most of the increase in lifetime income inequality within gender groups. Median lifetime income for men fell 10%-19% across cohorts, while women's median lifetime income rose 22%-33% from very low initial levels, leaving overall lifetime inequality flat.

Fatih Guvenen ,Greg Kaplan, Jae Song, and Justin Weidner National Bureau of Economic Research
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Lifetime incomes in the US over six decades show that wider dispersion of 25-year-old incomes is the chief driver of lifetime income inequality. @FatihGuvenen @GregKaplan @JaeSong @JustinWeidner, @nberpub.

What drives rising lifetime income inequality within gender groups?

Core argument: Median lifetime income for U.S. men declined 10%–19% from 1967 to 1983, with little-to-no rise in the lower three-quarters of the male income distribution.

The study highlights that the wider dispersion of 25-year-old incomes is the chief driver of lifetime income inequality. From 1967 to 1983, median lifetime income for men declined by 10%-19%, with little-to-no rise in the lower three-quarters of the male income distribution. For women, median lifetime income increased by 22%-33% from 1957 to 1983, but these gains were relative to very low initial levels. The increase in lifetime income inequality within gender groups is largely due to rising inequality at young ages. Despite a closing gender gap, overall lifetime inequality remains flat. The findings underscore substantial changes in labor market outcomes for younger workers as a critical driver of trends in both the level and inequality of lifetime income over the past 50 years.

Takeaways by Macro Roundup® AI

  1. Median lifetime income for U.S. men declined 10%–19% from 1967 to 1983, with little-to-no rise in the lower three-quarters of the male income distribution.
  2. Median lifetime income for women rose 22%–33% from 1957 to 1983, though these gains came from very low initial levels.
  3. The study attributes rising lifetime income inequality within gender groups chiefly to wider dispersion of incomes at age 25, while overall lifetime inequality remains flat as the gender gap closes.

Stdu finds US incomes are more widely dispersed among 25-year-olds than they were in the past and that median 25-year-old incomes have drifted downward. The study also finds lifetime incomes grow similarly across the income spectrum as they have historically and concludes that the wider dispersion of 25-year-old incomes is the chief driver of lifetime income inequality

“…Using panel data on individual labor income histories from 1957 to 2013, we document two empirical facts about the distribution of lifetime income in the United States. First, from the cohort that entered the labor market in 1967 to the cohort that entered in 1983, median lifetime income of men declined by 10%-19%. We find little-to-no rise in the lower three-quarters of the percentiles of the male lifetime income distribution during this period. Accounting for rising employer-provided health and pension benefits partly mitigates these findings but does not alter the substantive conclusions. For women, median lifetime income increased by 22%-33% from the 1957 to the 1983 cohort, but these gains were relative to very low lifetime income for the earliest cohort. Much of the difference between newer and older cohorts is attributed to differences in income during the early years in the labor market. Partial life-cycle profiles of income observed for cohorts that are currently in the labor market indicate that the stagnation of lifetime incomes is unlikely to reverse. Second, we find that inequality in lifetime incomes has increased significantly within each gender group. However, the closing lifetime gender gap has kept overall lifetime inequality virtually flat. The increase within gender groups is largely attributed to an increase in inequality at young ages, and partial life-cycle income data for younger cohorts indicate that the increase in inequality is likely to continue. Overall, our findings point to the substantial changes in labor market outcomes for younger workers as a critical driver of trends in both the level and inequality of lifetime income over the past 50 years….”

Fatih Guvenen,Greg Kaplan, Jae Song, and Justin Weidner, “Lifetime Incomes in the United States over Six Decades,” NBER, April 2017, http://www.nber.org/papers/w23371

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