Welfare Inequality versus Income Inequality
In: GMU Working Paper in Economics No. 22-04
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In: GMU Working Paper in Economics No. 22-04
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In: Noghanibehambari, H. and Rahnamamoghadam, M., 2020. Is income inequality reflected in consumption inequality in Iran?. Middle East Development Journal, pp.1-20.
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Working paper
Inequality has become a malignant, contagious disease. It feeds, it grows, it attaches itself to nearly all aspects of life. It poisons or impedes many of our relationships. Above all, it is a threat to the health and stability of our democratic republic. It has become the major issue of our time. We can see more clearly how and why it has become so as we review eight major features of our society. Refer to the diagram below as you read.
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In: American economic review, Band 105, Heft 9, S. 2725-2756
ISSN: 1944-7981
We revisit to what extent the increase in income inequality since 1980 was mirrored by consumption inequality. We do so by constructing an alternative measure of consumption expenditure using a demand system to correct for systematic measurement error in the Consumer Expenditure Survey. Our estimation exploits the relative expenditure of high- and low-income households on luxuries versus necessities. This double differencing corrects for measurement error that can vary over time by good and income. We find consumption inequality tracked income inequality much more closely than estimated by direct responses on expenditures. (JEL D31, D63, E21)
In: Discussion paper series 2749
Social scientists study two kinds of inequality: inequality between persons (as in income inequality) and inequality between subgroups (as in racial inequality). This paper analyzes the mathematical connections between the two kinds of inequality. The paper proceeds by exploring a set of two-parameter continuous probability distributions widely used in economic and sociological applications. We define a general inequality parameter, which governs all measures of personal inequality (such as the Gini coefficient), and we link this parameter to the gap (difference or ratio) between the means of subdistributions. In this way we establish that, at least in the two-parameter distributions analyzed here, and for the case of two nonoverlapping subgroups, as personal inequality increases, so does inequality between subgroups. This general inequality parameter also governs Lorenz dominance. Further, we explore the connection between subgroup inequality (in particular, the ratio of the bottom subgroup mean to the top subgroup mean) and decomposition of personal inequality into between-subgroup and within-subgroup components, focusing on an important decomposable measure, Theil's MLD, and its operation in the Pareto case. This allows us to establish that all the quantities in the decomposition are monotonic functions of the general inequality parameter. Thus, the general inequality parameter captures the deep structureʺ of inequality. We also introduce a whole-distribution graphical tool for assessing personal and subgroup inequality. Substantively, this work suggests that in at least some societies, characterized by special income distributions, whenever inequality disrupts social harmony and social cohesion, it attacks on two fronts, via subgroup inequality as well as personal inequality.
In: Tinbergen Institute Discussion Paper 2013-124/VI
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Working paper
In: IMF Working Paper No. 17/236
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In: Radical teacher: a socialist, feminist and anti-racist journal on the theory and practice of teaching, Band 125
ISSN: 1941-0832
Poetry
In: The Political Thought of the Conservative Party since 1945, S. 178-194
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This paper shows that higher levels of perceived wage inequality are associated with a weaker (stronger) belief into meritocratic (non-meritocratic) principles as being important in determining individual wages. This finding is robust to the use of an instrumental-variable estimation strategy which takes the potential issue of reverse causality into account, and it is further corroborated using various complementary measures of individuals' perception of the chances and risks associated with an unequal distribution of economic resources, such as their perception of the chances of upward mobility. I finally show that those individuals perceiving a high level of wage inequality also tend to be more supportive of redistributive policies and progressive taxation, and that they tend to favor the political left, suggesting a feedback effect of inequality perceptions into the political-economic sphere. Taken together, these findings suggest that high levels of perceived wage inequality have the potential to undermine the legitimacy of market outcomes.
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This paper shows that higher levels of perceived wage inequality are associated with a weaker (stronger) belief into meritocratic (non-meritocratic) principles as being important in determining individual wages. This finding is robust to the use of an instrumental-variable estimation strategy which takes the potential issue of reverse causality into account, and it is further corroborated using various complementary measures of individuals' perception of the chances and risks associated with an unequal distribution of economic resources, such as their perception of the chances of upward mobility. I finally show that those individuals perceiving a high level of wage inequality also tend to be more supportive of redistributive policies and progressive taxation, and that they tend to favor the political left, suggesting a feedback effect of inequality perceptions into the political-economic sphere. Taken together, these findings suggest that high levels of perceived wage inequality have the potential to undermine the legitimacy of market outcomes.
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