Inequality, Income Growth, and Mobility: The Basic Facts

TLDR

The essay reviews key facts on labor‑market income distribution, noting that the postwar period of rapid growth and stable inequality ended in the 1970s. Real mean earnings barely rose while earnings inequality increased sharply, driven by both inter‑group and intra‑group disparities, and labor‑market mobility remained essentially unchanged.

Abstract

This essay brings together the factual material on changes in the distribution of labor market income that any of the theories addressed in the other papers in this symposium must address. The broad stylized facts are that the rapid growth and stable level of inequality of both total family income and individual labor market that marked the postwar period came to an end during the 1970s. Real mean earnings grew very little but inequality of earnings rose substantially. This reflected increases both in inequality between education and experience groups and within groups. Mobility showed little change over this period.