Piketty and Saez (2003) found that income inequality rose substantially between 1979 and 2002 because the top 10 percent of the income distribution took 91 percent of the income growth during that period. As the real incomes of the top 10 percent soared, the incomes of the bottom 90 percent stagnated. Piketty and Saez’s findings garnered tremendous attention and were cited repeatedly. But many researchers eventually found problems with Piketty and Saez’s approach and developed income inequality measures that led to different findings.
Though measuring inequality seems straightforward and uncontroversial, methodological issues greatly affect findings. Even Piketty, Saez, and Zucman (2018) reported new results based on a completely different approach from Piketty and Saez (2003). This brief presents the intricacies of several income inequality studies and explains their different results.View Article