Wealth, Top Incomes, and Inequality

in Hamilton, Kirk; Hepburn, Cameron (Eds.) National Wealth: What is Missing, Why it Matters (2017)

Although it is heartening to see wealth inequality being taken seriously, key concepts are often muddled, including the distinction between income and wealth, what is included in "wealth", and facts about ... [more ▼]

Although it is heartening to see wealth inequality being taken seriously, key concepts are often muddled, including the distinction between income and wealth, what is included in "wealth", and facts about wealth distributions. This chapter highlights issues that arise in making ideas and facts about wealth inequality precise, and employs newly-available data to take a fresh look at wealth and wealth inequality in a comparative perspective. The composition of wealth is similar across countries, with housing wealth being the key asset. Wealth is considerably more unequally distributed than income, and it is distinctively so in the United States. Extending definitions to include pension wealth however reduces inequality substantially. Analysis also sheds light on life-cycle patterns and the role of inheritance. Discussion of the joint distributions of income and wealth suggests that interactions between increasing top income shares and the concentration of wealth and income from wealth towards the top is critical. [less ▲]

Assessing Individual Income Growth

in Economica (2016), 83(332), 679-703

We develop methods for describing distributions of income growth across individuals and for comparing changes in growth distributions over time. The methods include graphical devices (‘income growth ... [more ▼]

We develop methods for describing distributions of income growth across individuals and for comparing changes in growth distributions over time. The methods include graphical devices (‘income growth profiles’) and dominance conditions, and also summary indices, together with associated methods of estimation and inference. Taking an explicitly longitudinal perspective, our approach illuminates clearly who are the gainers and the losers, and also provides distributionally-sensitive assessments—ones that allow the income growth for different individuals to be weighted differently. Our empirical application shows that the pattern of income growth in Britain over the period 1992–6 was less pro-poor than that for 1998–2002, and not significantly different from the pattern for 2001–5. [less ▲]

Modeling the Joint Distribution of Income and Wealth

in Garner, Thesia; Short, Kathleen (Eds.) Measurement of Poverty, Deprivation, and Economic Mobility (2015)

This paper considers a parametric model for the joint distribution of income and wealth. The model is used to analyze income and wealth inequality in five OECD countries using comparable household-level ... [more ▼]

This paper considers a parametric model for the joint distribution of income and wealth. The model is used to analyze income and wealth inequality in five OECD countries using comparable household-level survey data. We focus on the dependence parameter between the two variables and study whether accounting for wealth and income jointly reveals a different pattern of social inequality than the traditional “income only” approach. We find that cross-country variations in the dependence parameter effectively account only for a small fraction of cross-country differences in a bivariate measure of inequality. The index appears primarily driven by differences in inequality in the wealth distribution. [less ▲]

Luxembourg: Has inequality grown enough to matter?

in Nolan, Brian; Salverda, Wiemer; Checchi, Daniele (Eds.) et al Changing Inequalities and Societal Impacts in Rich Countries: Thirty Countries' Experiences (2014)

Luxembourg experienced remarkable economic performance and employment growth since the middle of the 1980s. Based on the development of the financial sector, this growth benefited massively from the ... [more ▼]

Luxembourg experienced remarkable economic performance and employment growth since the middle of the 1980s. Based on the development of the financial sector, this growth benefited massively from the contribution of immigrants and cross-border workers to the labour force. High economic growth led to a rapid improvement in the overall living standard of the resident population. During the same period, income inequality increased too, albeit modestly. Even if the country can still be considered a low inequality country by international standards, this trend is a potential source of concern. This chapter analyses the factors that explain the rise in income inequality between 1985 and 2010 and provides a descriptive account of whether this trend has been correlated with a set of social, cultural, and political outcomes. By and large, the positive impact of the improvement of overall living standards seems to have prevailed over the potential detrimental effects of increasing inequality. [less ▲]

The Relationship between EU Indicators of Persistent and Current Poverty

in Social Indicators Research (2014), 116(2), 611-638

The current poverty rate and the persistent poverty rate are both included in the EU's portfolio of primary indicators of social inclusion. We show that there is a near-linear relationship between these ... [more ▼]

The current poverty rate and the persistent poverty rate are both included in the EU's portfolio of primary indicators of social inclusion. We show that there is a near-linear relationship between these two indicators across EU countries drawing on empirical analysis of EU-SILC and ECHP data. Using a prototypical model of poverty dynamics, we explain how the near-linear relationship arises and show how the model can be used to predict persistent poverty rates from current poverty information. In the light of the results, we discuss whether the EU's persistent poverty measure and the design of EU-SILC longitudinal data collection require modification. [less ▲]

Inequality, growth and mobility: The intertemporal distribution of income in European countries 2003--2007

in Economic Modelling (2013), 35(C), 931-939

This paper exploits EU Statistics on Income and Living Conditions longitudinal data 2003–2007 to describe the intertemporal distribution of income in twenty-six European countries prior to the onset of ... [more ▼]

This paper exploits EU Statistics on Income and Living Conditions longitudinal data 2003–2007 to describe the intertemporal distribution of income in twenty-six European countries prior to the onset of the Great Recession. We document levels, inequality and progressivity in the distribution of year-on-year income gains and losses and examine the relationship of these with inequality and poverty indicators. New Member States have typically seen individual incomes grow faster than other EU countries. Income gains were disproportionately pro-poor in all countries. We therefore observe regression to the mean both among EU countries and among individuals within countries. However, short-run income mobility does not significantly reduce inequality of time-averaged incomes. Potential issues about cross-country comparability of the data and the short period under consideration call for caution in interpreting our results, however. [less ▲]

The joint distribution of income and wealth

in Gornick, Janet; Jäntti, Markus (Eds.) Economic Inequality in Cross-National Perspective (2013)

The measurement of economic inequality

in Salverda, Wiemer; Nolan, Brian; Smeeding, Timothy M. (Eds.) Oxford Handbook on Economic Inequality (2009)

This article provides an introduction to methods for the measurement of economic inequality. It reviews the inequality measures that economists have developed, and explains how one might choose between ... [more ▼]

This article provides an introduction to methods for the measurement of economic inequality. It reviews the inequality measures that economists have developed, and explains how one might choose between indices or check whether conclusions about inequality difference can be derived without choosing any specific index. It reviews mobility measurement and some fundamental questions about how the distributions of economic interest are defined. [less ▲]

Income mobility profiles

in Economics Letters (2009), 102(2), 93-95

An `income mobility profile' is a graphical tool to portray income mobility and identify the association between individual movements and initial status which, despite its importance when assessing the ... [more ▼]

An `income mobility profile' is a graphical tool to portray income mobility and identify the association between individual movements and initial status which, despite its importance when assessing the social relevance of mobility, is often discounted by aggregate mobility indices. [less ▲]