Question

8.(2 points) Suppose that the table below shows the share of aggregate income received by each fifth and the top 5 percent of U.S. households in 2000 and 2020. Year Lowest Quintile Second Quintile Third Quintile Fourth Quintile Highest Quintile Top 5% 2000 3.6 8.9 14.8 23.0 49.8 22.1 2020 2.5 6.8 10.1 22.0 58.6 30.3 Based on the data in the table, did the U.S. income distribution become more or less unequal over time? (Note: it may be helpful for you to plot the Lorenz Curve in order to visualize the answer--see page 366 in our textbook.)

Answer 1

More unequal distribution

unequal distribution means larger people are sharing lower income whereas a smaller group share a larger proportion of income.

Thus from 2000 to 2020, lowest quintile share in income reduces from 3.6 to 2.5% which means poorer are becoming more poorer. Whereas richer are become more richer leading to more unequal distribution over time