Constructing Long and Dense Time-Series of Inequality Using the Theil Index
AbstractThis paper proposes the application of the between-group component of the Theil index to data on wages, earnings, and employment by industrial classification, in order to measure the evolution of wage or earnings inequality through time. We provide formal criteria under which such a between-group Theil statistic can reasonably be assumed to give results that also track the (unobserved) evolution of inequality within industries. The advantage of this approach lies in the widespread availability of data from which long and dense time-series of inequality may be constructed. We conclude with an empirical application to the case of Brazil, an important developing country for which satisfactory Gini coefficients are scarce, but for which a between-industries Theil statistic may be computed on a monthly basis as far back as 1976.
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Bibliographic InfoArticle provided by Eastern Economic Association in its journal Eastern Economic Journal.
Volume (Year): 26 (2000)
Issue (Month): 1 (Winter)
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Find related papers by JEL classification:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
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