Top income inequality, defined as the income gap within the top 1% income group, has been rising in the United States since the 1980s. Coinciding with this rise, the large reductions in the topmarginal tax rate exhibit a strong correlation with the increase in both top income inequality and top income shares. This paper identifies endogenous human capital accumulation as the link between change...

Since the 1980s top income inequality within occupations as diverse bankers, managers, doctors, lawyers and scientists has increased considerably. Such a broad pattern led literature to search for common explanation. In this paper, however, we argue that increases in originating few can spill overinto others creating broader changes inequality. particular, study an assignment model where genera...