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The Saez Hypothesis

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Multiple Choice

What is the main idea behind the Saez Hypothesis?

  1. The top 1% of earners will capture a larger and larger share of the total income as the overall income inequality increases.
  2. The top 1% of earners will capture a smaller and smaller share of the total income as the overall income inequality increases.
  3. The top 1% of earners will capture a constant share of the total income regardless of the overall income inequality.
  4. The top 1% of earners will capture a larger and larger share of the total income as the overall income equality increases.
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