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Sources of Inequality: Measuring the Contributions of Income Sources to Rising Family Income Inequality

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  • Reed, Deborah
  • Cancian, Maria

Abstract

We develop a simulation method for measuring the impact of changes in the distributions of the main income sources on growth in family income inequality. We simulate the entire distribution of family income under the counterfactual, "What if the distribution of each source had not changed?" The simulation method allows us to evaluate the impact of changes at any point in the distribution as well as with multiple measures of inequality. We incorporate married-couple and single-person families, appropriately accounting for changes in the proportion married. We apply the simulation method to investigate the impact of changes in male earnings, female earnings, and capital income on the distribution of family income in the United States between 1969 and 1999. We find that changes in the distribution of male earnings account for more of the growth in family income inequality than do changes in any other source of income. Changes in the distribution of female earnings have reduced family income inequality. Copyright 2001 by The International Association for Research in Income and Wealth.

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Bibliographic Info

Article provided by International Association for Research in Income and Wealth in its journal Review of Income & Wealth.

Volume (Year): 47 (2001)
Issue (Month): 3 (September)
Pages: 321-33

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Handle: RePEc:bla:revinw:v:47:y:2001:i:3:p:321-33

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Cited by:
  1. Kimhi, Ayal, 2008. "Male Income, Female Income, and Household Income Inequality in Israel: A Decomposition Analysis," Discussion Papers 46293, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
  2. repec:ese:iserwp:2012-17 is not listed on IDEAS
  3. Angus C. Chu, 2010. "Effects of Patent Policy on Income and Consumption Inequality in a R&D Growth Model," Southern Economic Journal, Southern Economic Association, vol. 77(2), pages 336-350, October.
  4. Shahina Amin & Julie DaVanzo, 2002. "The Impact of Wives' Earnings Inequality among Married-Couple Households in Malaysia," Working Papers 02-09, RAND Corporation Publications Department.
  5. Salverda, Wiemer & Checchi, Daniele, 2014. "Labour-Market Institutions and the Dispersion of Wage Earnings," IZA Discussion Papers 8220, Institute for the Study of Labor (IZA).
  6. Sotomayor, Orlando, 2004. "Development and Income Distribution: The Case of Puerto Rico," World Development, Elsevier, vol. 32(8), pages 1395-1406, August.
  7. Amin, Shahina & DaVanzo, Julie, 2004. "The impact of wives' earnings on earnings inequality among married-couple households in Malaysia," Journal of Asian Economics, Elsevier, vol. 15(1), pages 49-70, February.
  8. Sotomayor, Orlando J., 2009. "Changes in the Distribution of Household Income in Brazil: The Role of Male and Female Earnings," World Development, Elsevier, vol. 37(10), pages 1706-1715, October.
  9. Carlos Gradín & Olga Cantó & Coral del Río, 2006. "Poverty and Women’s Labor Market Activity: the Role of Gender Wage Discrimination in the EU," Working Papers 40, ECINEQ, Society for the Study of Economic Inequality.

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