Long-run inequality persistence in the US, 1870-2019

This paper studies the long-run persistence of inequality in the U.S. With this aim, both income and wealth inequality measures covering the period from 1870 to 2019 have been analyzed. The persistent character of inequality has been assessed using unit root and structural break test statistics for time series. Furthermore, the determinants of inequality persistence have been explored by implementing Bayesian model averaging techniques in a generalized linear model framework. Our results suggest that the wealth-to-income ratio displays a non-stationary behavior throughout the whole sample period. On the contrary, the Gini index of disposable income and the top 10% income share alternate between I(0) and I(1) regimes. We also find that, while a higher level of globalization increases the persistence of income inequality, it is inversely related to the levels of educational attainment and trade union membership.