Poverty and income inequality in the early stages of the Great Recession

Document Type

Book chapter

Source Publication

The Great Recession

Publication Date


First Page


Last Page



Russell Sage Foundation


In the chapter, the authors explore the extent to which the Great Recession increased poverty and reduced income. The official poverty rate for 2009, 14.3 percent, is slightly less than the peak poverty rates of the recessions of the 1980s abd 1990s, but simulations show that poverty may rise to well over 15 percent by 2012. This recession-induced increase in poverty is especially prominent among young unskilled men and children.

The labor-market data also reveal an increase in inequality from 2007 to 2009, with incomes falling for the bottom 60 percent of Americans while holding steady or rising for those at the top. If one takes into account income generated by wealth, this takeoff in inequality is moderated and because wealth-generated income fell off substantially at the top and middle of the districution. This is likely to be just a temporary falloff given that the stock market has since rebounded and will allow those at the top to continue to regain some of their wealth-generated income. In contrast to the great compression of incomes that followed that 1930s, so far the Great Recession has done little to reduce the gap between rich and poor.

Publisher Statement

ISBN of source publication: 9780871544216



Recommended Citation

Smeeding, T. M., Thompson, J. P., Levanon, A., & Burak, E. (2011). Poverty and income inequality in the early stages of the Great Recession. In D. B. Grusky, B. Western, & C. Wimer (Eds.), The Great Recession (pp. 82-126). New York: Russell Sage Foundation.

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