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Income Equality Is A Bottom-Up Problem

A look at the household demographics of income inequality, from AEI’s Mark Perry:

Most of the discussion on income inequality focuses on the relative differences over time between low-income and high-income American households, but it’s also instructive to analyze the demographic differences among income groups at a given point in time to answer the question: How are high-income households different from low-income households?

More affluent households are better-educated, married, and in their peak-earning years.  People naturally move up as they get married and get older.  But as we delay adulthood until the late twenties and early thirties, we also raise barriers between those quintiles.  Encouraging people to take on mortgages for college degrees they don’t need is a big part of the problem.  Passing laws that encourage people to get divorced is another.

Posted in Economics.