Percent Of Earners Research Articles

“Beauty too rich for use”: Billionaires’ assets and attractiveness

We examine how the net worth of billionaires relates to their looks, as rated by 16 people of different gender and ethnicity. As a group, billionaires are both more educated and better-looking than average for their age. However, when we compare among billionaires, wealth is neither related to beauty. nor to educational attainment. The results do not arise from measurement error or nonrandom sample selectivity. They are consistent with econometric theory about the impact of truncating a sample to include observations only from an extreme tail of the dependent variable. The point is underscored by comparing estimates of earnings equations using all employees in the American Community Survey to those using a sample of just the top 0.1 percent of earners. The findings suggest the powerful role of luck within the extremes of the distributions of economic outcomes. That empirical regularities tend to disappear in the far tails is relevant to analyzing any sample of highly successful or unsuccessful individuals.

Industry Payments to Plastic Surgeons, 2013 to 2018: Who's Getting Paid?

The Physician Payments Sunshine Act of 2010 mandated that all industry payments to physicians be publicly disclosed. To date, industry support of plastic surgeons has not been longitudinally characterized. The authors seek to evaluate payment trends from 2013 to 2018 and characteristics across plastic surgeon recipients of industry payments. The authors cross-referenced those in the 2019 American Society of Plastic Surgeons member database with Centers for Medicare & Medicaid Services Open Payments database physician profile identification number indicating industry funds received within the study period. We categorized surgeons by years since American Board of Plastic Surgery certification, practice region, and academic affiliation. A sum of $89,436,100 (247,614 payments) was received by 3855 plastic surgeons. The top 1 percent of earners (n = 39) by dollar amount received 52 percent of industry dollars to plastic surgeons; of these, nine (23 percent) were academic. Overall, 428 surgeons (11 percent) were academic and received comparable dollar amounts from industry as their nonacademic counterparts. Neither geographic location nor years of experience were independent predictors of payments received. The majority of individual transactions were for food and beverage, whereas the majority of industry dollars were typically for royalties or license. Over half of all industry dollars transferred went to just 1 percent of American Society of Plastic Surgeons members receiving payments between 2013 and 2018. Considerable heterogeneity exists when accounting for payment subcategories.

Male Fertility: Facts, Distribution and Drivers of Inequality

We document new facts on the distribution of male fertility and its relationship with men's labor market outcomes. Using Norwegian registry data on all births since 1967, we show that rates of male childlessness in recent cohorts are 71\% among the lowest five percent of earners but only 11\% among the highest earners, and that this gap widened by almost 20 percentage points over the last thirty cohort years. There has been a compression in the fertility distribution, with a substantial share of men being ``left behind'' and fewer men experiencing a larger share of the population's new births. We use firm bankruptcies as a source of variation in job loss and earnings to provide robust evidence that men experiencing negative labor market shocks are less likely to experience the birth of a child, transition out of childlessness, and be partnered, and that these effects are persistent up to 15 years after the event. We conclude by documenting that men's fertility penalty to job loss has increased markedly over the last three decades.

Male Fertility: Facts, Distribution and Drivers of Inequality

We document new facts on the distribution of male fertility and its relationship with men's labor market outcomes. Using Norwegian registry data on all births since 1967, we show that rates of male childlessness in recent cohorts are 72% among the lowest five percent of earners but only 11% among the highest earners, and that this gap widened by almost 20 percentage points over the last thirty cohort years. There has been a compression in the fertility distribution, with a substantial share of men being left behind and fewer men experiencing a larger share of the population's new births. We use firm bankruptcies as a source of variation in job loss and earnings to provide robust evidence that men experiencing negative labor market shocks are less likely to experience the birth of a child, transition out of childlessness, and be partnered, and that these effects are persistent up to 15 years after the event. We conclude by documenting that men's fertility penalty to job loss has increased markedly over the last three decades.

Unhappy Returns: A Preliminary Estimate of Taxpayers Responsiveness to the 2016 Top Tax Rate Hike

The top 1 percent of earners reacted strongly to the federal tax hike on high earners 2016, according to a new report from the C.D. Howe Institute. In “Unhappy Returns: A Preliminary Estimate of Taxpayers Responsiveness to the 2016 Top Tax Rate Hike,” author Alexandre Laurin finds the underlying behavioural response of taxpayers resulted in $1.2 billion in fresh revenue for the federal government but cost provincial treasuries about $1.3 billion in lost tax revenues.

Regulation and Income Inequality: The Regressive Effects of Entry Regulations

We examine the relationship between entry regulations and income inequality. Entry regulations increase the cost of legally starting a business relative to the alternatives — working for someone else, entering illegally, or exiting the labor force. We hypothesize that such regulations may cause greater income inequality, because entrepreneurs at the bottom rungs of the income distribution may have relatively greater difficulty surmounting costly barriers to entry. Combining entry regulations data from the World Bank Doing Business Index with various measures of income inequality, including Gini coefficients and income shares, we examine a pooled cross-section of 175 countries and find that countries with more stringent entry regulations tend to experience higher levels of income inequality. An increase by one standard deviation in the number of procedures required to start a new business is associated with a 1.5 percent increase in the Gini coefficient and a 5.6 percent increase in the share of income going to the top 10 percent of earners. Although we cannot eliminate the possibility of reverse causality, we are unaware of any theory that posits that income inequality causes entry regulations. We therefore offer several simple recommendations designed to minimize regulations’ adverse effect on income inequality.

The Working Poor: Two Perspectives on Reality—A Communication to the Editor Inviting a Discussion

The Working Poor: Two Perspectives on Reality—A Communication to the Editor Inviting a Discussion

Quantitative Macro Versus Sufficient Statistic Approach: A Laffer Curve Dilemma?

This article highlights two approaches to tax policy for the top 1 percent of earners. On the one hand are dynamic general equilibrium models requiring complicated calibration and simulation algorithms and strong structural assumptions. On the other hand is the sufficient statistic approach, which attempts to parsimoniously reach the trinity of empirical, theoretical, and policy relevance. The author illustrates ongoing work highlighting explicit connections between these two approaches.

Quantitative Macro Versus Sufficient Statistic Approach: A Laffer Curve Dilemma?

This article highlights two approaches to tax policy for the top 1 percent of earners. On the one hand are dynamic general equilibrium models requiring complicated calibration and simulation algorithms and strong structural assumptions. On the other hand is the sufficient statistic approach, which attempts to parsimoniously reach the trinity of empirical, theoretical, and policy relevance. The author illustrates ongoing work highlighting explicit connections between these two approaches.

Does Radical Partisan Politics Affect National Income Distributions? Congressional Polarization and Income Inequality in the United States, 1913–2008*

ObjectiveRecent research indicates that political polarization in Congress and income inequality share a closely linked positive association. But virtually no studies examine the direction of influence between these variables as it is assumed that income inequality causes political polarization. The major purpose of this investigation is to examine the temporal causal ordering of these variables. Methods. This study constructs a time series national‐level data set with information for the years 1913 to 2008. Vector autoregression and granger causality tests are utilized to explore the temporal causal ordering of congressional polarization and the income share of the top 0.1, 1.0, 5.0, and 10.0 percent of earners in the United States. Autoregressive conditional heteroskedasticity regressions are also employed to assess the strength of the association between congressional polarization and top incomes net of relevant control variables. Results. The findings indicate that the past values of congressional polarization are better predictors of top income shares than vice versa. The results also demonstrate that polarization in the House of Representatives produces a more consistent and robust connection with top incomes than polarization in the Senate. Lastly, congressional polarization only produces robust associations with the income share of the top 0.1 and 1.0 percent of earners but not for the top 5.0 and 10.0 percent. Conclusion. While the Senate possesses more powerful negative agenda control procedures to stifle the legislative processes vis‐à‐vis the House, it is polarization in the latter that returns the more robust associations with income inequality.

The Economic Efficiency of Progressive Taxation

This paper suggests two mechanisms by which a progressive distribution of tax burdens may promote economic efficiency. First, a progressive tax rate structure indexed to the median income may discourage rent seeking by powerful interest groups. Second, progressive taxation favors income streams that are long-sustained over those that pay off over a shorter time span; this bias is likely to favor more socially productive activities. Consistent with these propositions, a marked retreat from progressivity for the top 0.1 percent of earners followed two decades of post-war economic expansion and preceded the productivity slowdown of the 1970s and the serial crises that have followed. The analysis suggests that progressivity is especially important at the top of the income distribution and that a top marginal rate that sets in too low — as would a single rate that applied to the top 0.1 percent of earners — would not achieve the right incentives.

Canadian Inequality: Recent Developments and Policy Options

Considerable concern has recently been expressed worldwide about growing income inequality. Much of the discussion, though, has been in general terms and focused on the US experience. To understand whether and how Canada ought to respond to this development, we need to be clear on the facts. This paper documents Canadian patterns in income inequality and investigates the top 1 percent of earners—the group receiving the most attention. We summarize what is known about the causes of growing income inequality, including the role of gender wage differences. Finally, we outline policy options for reducing—or slowing the growth of—inequality.

Looking Under the Lamp-Post: Using the Piketty-Saez Data Set to Understand Income Inequality and Income Shifting

From at least 1960-1986 the PikettySaez (P-S) data set understates the concentration of income among top income earners. Adjusting the P-S data series for income shifting in response to changes in income taxation for top earners shifts income shares upward for the years prior to the Tax Reform Act of 1986 (TRA86). We calculate that adjusted income share of the top one percent of earners are overstated by over two percentage points for many of the years that the P-S series reports historically low income inequality. Our adjustment reflects just one aspect of major tax regime change during the past century, namely the relationship between the top marginal personal income tax rate and the corporate income tax rate. It is likely that adjustments for other changes in income tax law would lead to even greater increases in income shares during the high-marginal rate era between World War II and the mid-1980s.