the questions are slightly different: Why might the distribution of income be well represented by a Pareto distribution, and why does the inequality parameter change over time and differ across countries? Interestingly, it turns out that there is a lot more inequality among city populations or firm employment than there is among incomes (their η’s are close to 1 instead of 0.6). Also, the size distribution of cities and firms is surpris- ingly stable when compared to the sharp rise in US top income inequality.ย