“This growing inequality,” President Obama said during his recent Knox College speech, “is not just morally wrong, it’s bad economics.”
A strong statement — but one not supported by data, suggests a blockbuster new study by economists Steven Kaplan (University of Chicago) and Joshua Rauh (Stanford University). They examine two possible explanations for the rise in top-end inequality in their paper “It’s the Market: The Broad-Based Rise in the Return to Top Talent”:
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