The Effects of Some Social and Economic Indicators on the Gap Between the American Income Inequality Level and Its Optimal Level (original) (raw)

Trends in Inequality Using Consumption-Expenditures: The U.S. From 1960 to 1993

Review of Income and Wealth, 1997

While much of the evidence suggests that there was an increase in inequality in the U.S. during the 1980s, the reasons are less evident. Using the U.S. Consumer Expenditure Survey data, we find that the inequality of consumption-expenditures, as well as the inequality of other measures of resources, widened considerably during the 1980s. While previous studies suggest that increasing inequality is mainly due to increases in within group inequality, we show that by decomposing inequality by the interaction of family type and education almost three-fourths of the increase in inequality is accounted for by changes in inequality between groups and by shifts in the population.

The Dynamics of Personal Income Distribution and Inequality in the United States

SSRN Electronic Journal, 2013

We model the evolution of age-dependent personal income distribution and inequality as expressed by the Gini ratio. In our framework, inequality is an emergent property of a theoretical model we develop for the dynamics of individual incomes. The model relates the evolution of personal income to the individual's capability to earn money, the size of her work instrument, her work experience and aggregate output growth. Our model is calibrated to the single-year population cohorts as well as the personal incomes data in 10and 5-year age bins available from March Current Population Survey (CPS). We predict the dynamics of personal incomes for every single person in the working-age population in the USA between 1930 and 2011. The model output is then aggregated to construct annual age-dependent and overall personal income distributions (PID) and to compute the Gini ratios. The latter are predicted very accurately-up to 3 decimal places. We show that Gini for people with income is approximately constant since 1930, which is confirmed empirically. Because of the increasing proportion of people with income between 1947 and 1999, the overall Gini reveals a tendency to decline slightly with time. The age-dependent Gini ratios have different trends. For example, the group between 55 and 64 years of age does not demonstrate any decline in the Gini ratio since 2000. In the youngest age group (from 15 to 24 years), however, the level of income inequality increases with time. We also find that in the latter cohort the average income decreases relatively to the age group with the highest mean income. Consequently, each year it is becoming progressively harder for young people to earn a proportional share of the overall income.

Does Income Inequality Lead to Consumption Inequality? Evidence and Theory1

Review of Economic Studies, 2006

This paper investigates the relationship between the cross-sectional income and consumption distribution in the US. Using data from the Consumer Expenditure Survey and the Current Population Survey we …nd that in the last two decades a rising income inequality has not been accompanied by a rise in consumption inequality. The Gini coe¢cient of after-tax labor income increased from 0.33 to 0.42 between 1980 and 1997. On the other hand, the Gini coe¢cient for nondurable consumption expenditures plus imputed service ‡ows from consumer durables has remained roughly constant at 0.31 in the same period.

The World Distribution of Income And Its Inequality, 1970-2009

Review of Income and Wealth, 2013

This paper provides a full decomposition of world inequality, as measured by the Gini coefficient, in the period 1970-2009. In particular, using the Analysis of Gini (ANOGI), the paper describes the evolution of between inequality, within inequality, and the impact of overlapping on both factors. While there is evidence that between inequality in the last decade significantly declined due to the rapid Chinese growth, within inequality and overlapping went in the opposite direction. Furthermore, with the exception of some Asian countries, the rest of the world has not moved significantly. As a result, world inequality remains high by any standard.

Inequality Measurement and the Rich: Why inequality increased more than we thought

2018

Many standard inequality measures can be written as ratios with the mean in the denominator. When one income moves away from equality, both the numerator and the denominator may vary in the same direction and such indices may decrease. This anomalous behaviour is not shared by median-normalised inequality measures developed in this paper, where the mean at the denominator is replaced by the median. However, median-normalised inequality measures do not respect the principle of transfers. We show that the absolute Gini and the mean logarithmic deviation, or second Theil index, are the only measures that both avoid anomalous behaviour when one income is varied and also satisfy the principle of transfers. An application shows that the increase in inequality in the United States over recent decades is understated by the Gini index and that the mean logarithmic deviation index should be preferred in practice.

Wealth inequality in the long run

How Was Life? Volume 2, 2021

This chapter provides an overview of long-term changes in wealth inequality, measured as net marketable wealth, based on two measures: the Gini index and the wealth share of the richest 10%. The chapter relies on current databases such as the World Inequality Database (WID) but expands considerably the time series for a range of countries by building upon the most recent research and by producing new estimates. For five Western countries (France, Italy, Sweden, the United Kingdom and the United States) it has been possible to provide estimates covering the period from 1820 to 2010. However, for other Western countries as well as for other areas of the world, much more work is needed before we can assess long-term trends in wealth inequality. Our data confirm the general picture of a creeping increase in inequality during the 19th century, followed by declines from the onset of World War I (1914) until the 1960s, and in many (but not all) countries a new tendency towards higher inequality since the 1970s. An overview of possible explanations for such trends is provided. The correlation of wealth inequality with per capita GDP is found to be quite weak and not always positive, implying that higher wealth inequality cannot be considered a simple side effect of economic growth.

Inequality in the World , 1950-2010 : Estimates from a New Data Set ☆

2013

This paper introduces a new quinquennial data set of educational inequality disaggregated by age group for 146 countries, from 1950 to 2010, by using the Gini index of education as a measure of the distribution of years of schooling. Based on recent estimates of average years of schooling from Barro and Lee (2010) our calculations take into consideration, for the first time, the changes over time in the duration of educational stages, in each country and for each age group. The downward trends in educational inequality observed during the last decades depend on age group, gender and development level. JEL Classification: D63, I21, J24, O15