Chart Detail

Cumulative change in real annual wages, by wage group, 1979–2010

Note: Data are for individual wage earners. Trend lines show cumulative percent change since 1979.

Source: Authors' analysis of Kopczuk, Saez, and Song (2010) and Social Security Administration wage statistics

Updated August 22, 2012

Documentation and methodology

Data taken from Kopczuk, Saez, and Song (2010), Table A-3. Data for 2006 through 2010 are extrapolated from 2004 data using changes in wage shares computed from Social Security Administration wage statistics (data for 2010 are at http://www.ssa.gov/cgi-bin/netcomp.cgi). The final results of the paper by Kopczuk, Saez, and Song printed in a journal used a more restrictive definition of wages so we employ the original definition, as recommended in private correspondence with Kopczuk. SSA provides data on share of total wages and employment in annual wage brackets such as for those earning between $95,000.00 and $99,999.99. We employ the midpoint of the bracket to compute total wage income in each bracket and sum all brackets. Our estimate of total wage income using this method replicates the total wage income presented by SSA with a difference of less than 0.1 percent. We used interpolation to derive cutoffs building from the bottom up to obtain the 0–90th percentile bracket and then estimate the remaining categories. This allows us to estimate the wage shares for upper wage groups. We use these wage shares computed for 2004 and later years to extend the Kopczuk, Saez, and Song series by adding the changes in share between 2004 and the relevant year to their series. To obtain absolute wage trends we used the SSA data on the total wage pool and employment and computed the real wage per worker (based on their share of wages and employment) in the different groups in 2011 dollars.

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