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Constructing Long and Dense Time-Series of Inequality Using the Theil Index

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Author Info

  • Pedro Conceicao

    (University of Texas)

  • James K. Galbraith

    (University of Texas)

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    Abstract

    This 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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    File URL: http://college.holycross.edu/RePEc/eej/Archive/Volume26/V26N1P61_74.pdf
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    Bibliographic Info

    Article provided by Eastern Economic Association in its journal Eastern Economic Journal.

    Volume (Year): 26 (2000)
    Issue (Month): 1 (Winter)
    Pages: 61-74

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    Handle: RePEc:eej:eeconj:v:26:y:2000:i:1:p:61-74

    Contact details of provider:
    Postal: c/o Dr. Alexandre Olbrecht, The Anisfield School of Business 205, Ramapo College, 505 Ramapo Valley Road, Ramapo, New Jersey 07430, USA
    Phone: (201) 684-7346
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    Web page: http://www.ramapo.edu/eea/journal.html
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    Related research

    Keywords: Inequality; Wage;

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    Cited by:
    1. Lee, Woojin, 2003. "Is democracy more expropriative than dictatorship? Tocquevillian wisdom revisited," Journal of Development Economics, Elsevier, vol. 71(1), pages 155-198, June.
    2. Kam Ki Tang & Dennis Petrie, 2007. "Non-Hierarchical Bivariate Decomposition of Theil Indexes," CEPA Working Papers Series WP032007, School of Economics, University of Queensland, Australia.
    3. Gomis-Porqueras, Pere & Garcilazo, Enrique, 2003. "EU Structural and Cohesion Funds in Spain and Portugal: Is Regional and National Inequality Increasing?," MPRA Paper 50343, University Library of Munich, Germany.

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