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Partisan Politics and the U.S. Income Distribution

Authors:
Publication Date:
Jan 2004
Project Programs:
Social Inequality

Census Bureau data reveal large, consistent differences in patterns of real pre-tax income growth under Democratic and Republican presidents in the post-war U.S. Democratic presidents have produced slightly more income growth for poor families than for rich families, resulting in a modest decrease in overall inequality. Republican presidents have produced a great deal more income growth for rich families than for poor families, resulting in a substantial increase in inequality. On average, families at the 95th percentile of the income distribution have experienced identical income growth under Democratic and Republican presidents, while those at the 20th percentile have experienced more than four times as much income growth under
Democrats as they have under Republicans. These differences are attributable to partisan differences in unemployment (which has been 30 percent lower under Democratic presidents, on
average) and GDP growth (which has been 30 percent higher under Democratic presidents, on average); both unemployment and GDP growth have much stronger effects on income growth at the bottom of the income distribution than at the top. Similar partisan differences appear in the distribution of post-tax income growth of households since 1980, despite the fact that the corresponding pre-tax income growth data for that period show little evidence of partisan differences.

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