Chapter 13 — Further Reading

On measuring and documenting inequality

Thomas Piketty, Capital in the Twenty-First Century, Harvard University Press, 2013 The most influential book on inequality since Rawls. Piketty documents the long-run trajectory of income and wealth inequality across many countries, proposes the r > g framework, and argues for a global wealth tax. Long (about 700 pages) but the first six chapters are essential. A landmark regardless of whether you agree with the policy conclusions.

Thomas Piketty and Emmanuel Saez, "Income Inequality in the United States, 1913–1998," Quarterly Journal of Economics, 2003 The foundational paper that used tax data to document the rise of top income shares in the U.S. The updated series (available at wid.world) is the standard data source for top-income research.

Gerald Auten and David Splinter, "Income Inequality in the United States: Using Tax Data to Measure Long-Term Trends," Journal of Political Economy, 2024 The most important critique of the Piketty-Saez estimates. Auten and Splinter argue that changes in tax reporting behavior have caused the Piketty-Saez series to overstate the rise of top income shares. The debate is technical and ongoing.

Branko Milanovic, Global Inequality: A New Approach for the Age of Globalization, Harvard University Press, 2016 Milanovic's "elephant chart" — showing which parts of the global income distribution gained most from globalization — is one of the most cited charts in inequality research. The book is excellent on the global picture.

Raj Chetty et al., "The Fading American Dream: Trends in Absolute Income Mobility Since 1940," Science, 2017 Chetty and coauthors estimate that about 50% of Americans born in 1984 earn more than their parents did at the same age — down from about 90% for the 1940 birth cohort. The paper documents the decline of intergenerational mobility in the U.S. Data available at opportunityinsights.org.

On the causes of inequality

Claudia Goldin and Lawrence Katz, The Race Between Education and Technology, Harvard University Press, 2008 Goldin and Katz argue that inequality has risen because the supply of educated workers has not kept pace with the demand created by SBTC. The solution, in their framing, is to invest in education. The book is the standard reference for the SBTC explanation.

David Autor, "Work of the Past, Work of the Future," AEA Papers and Proceedings, 2019 Autor's overview of how technology has reshaped the labor market, including the hollowing out of middle-skill jobs and the polarization of the wage distribution. Clear and accessible.

Robert Frank and Philip Cook, The Winner-Take-All Society, Free Press, 1995 The book that introduced the winner-take-all concept to a broad audience. Frank and Cook document the concentration of rewards in many markets (entertainment, sports, law, finance, academia) and propose policy responses.

Anthony Atkinson, Inequality: What Can Be Done?, Harvard University Press, 2015 Atkinson, one of the most influential economists to study inequality, proposes 15 specific policy measures. The book is practical, serious, and more egalitarian than most economics writing.

On the philosophical frameworks

John Rawls, A Theory of Justice, Harvard University Press, 1971 The most important book in political philosophy of the 20th century. Rawls's "veil of ignorance" and "difference principle" are the foundation of the Rawlsian framework.

Robert Nozick, Anarchy, State, and Utopia, Basic Books, 1974 The most important libertarian counterpoint to Rawls. Nozick argues for a "minimal state" and process-based justice.

Amartya Sen, The Idea of Justice, Harvard University Press, 2009 Sen argues that we don't need a single theory of perfect justice — we need practical ways to identify and address clear injustices. A constructive alternative to both Rawls and Nozick.

Arthur Okun, Equality and Efficiency: The Big Tradeoff, Brookings Institution, 1975 The classic short book on the efficiency-equity tradeoff. Cited in Chapter 8 and essential for Chapter 13.

On anti-poverty policy

Abhijit Banerjee and Esther Duflo, Poor Economics, PublicAffairs, 2011 The 2019 Nobel laureates' account of what works in anti-poverty policy, based on randomized controlled trials in developing countries. The lessons apply in rich countries too.

Hilary Hoynes and Jesse Rothstein, "Tax Policy Toward Low-Income Families," in The Economics of Tax Policy, Oxford University Press, 2017 A comprehensive review of EITC, CTC, and other tax-based anti-poverty programs in the U.S.

National Academies of Sciences, A Roadmap to Reducing Child Poverty, 2019 A blue-ribbon panel's estimate of what it would take to cut child poverty in half in the U.S. within 10 years. Specific, costed, and politically relevant.

On the K-shaped recovery (case study 2)

Federal Reserve Bank of St. Louis, On the Economy blog, multiple posts on the K-shaped recovery, 2020–2022 The St. Louis Fed published extensive analysis of how the COVID recession and recovery played out differently by income, education, and race.

Heather Long, Andrew Van Dam, Alyssa Fowers, and Leslie Shapiro, "The Covid-19 Recession Is the Most Unequal in Modern U.S. History," Washington Post, September 30, 2020 An early and influential piece documenting the K shape, with good data visualization.

Opportunity Insights Economic Tracker (tracktherecovery.org) Raj Chetty's team built a real-time tracker of economic activity by income level, location, and sector during the pandemic. The data is free and the visualizations are illuminating.

A reading order recommendation

If you have time for one of the books above, read Piketty's Capital in the Twenty-First Century, especially the first six chapters. It is the most consequential economics book of the 2010s, and reading it gives you the long-run context that this chapter could only sketch.

If you want the philosophical foundations, read Rawls's A Theory of Justice (at least Part I) and Nozick's Anarchy, State, and Utopia (at least Part I). Reading them together is much more illuminating than reading either alone.

If you want to see anti-poverty policy done rigorously, read Banerjee and Duflo's Poor Economics.

Chapter 14 — The Economics of Healthcare — is next. Healthcare is the market failure most Americans experience personally, and the chapter applies many of the tools from Chapters 11–13 (externalities, public goods, inequality) to the single most contested policy domain in U.S. domestic politics.