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Measuring the Effects of Socio-Economic Variables on the Income Distribution: An Application to the East German Transition Process

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  • Martin Biewen

Abstract

This paper develops a discrete variant of the semiparametric methodology of DiNardo, Fortin, and Lemieux (1996) (DFL) to measure the effects of socio-economic variables on the income distribution. Although the proposed method is also based on the calculation of hypothetical income distributions by reweighting the original population, it is much easier to implement. The framework is applied to examine the distributional effects of rising unemployment, decreasing female labor market participation, and widening income structure in East Germany following the reunification with West Germany in 1990. The empirical results suggest that both these tendencies contributed considerably to the recent increase in income inequality in East Germany. © 2000 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

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Bibliographic Info

Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 83 (2001)
Issue (Month): 1 (February)
Pages: 185-190

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Handle: RePEc:tpr:restat:v:83:y:2001:i:1:p:185-190

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Web page: http://mitpress.mit.edu/journals/

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Web: http://mitpress.mit.edu/journal-home.tcl?issn=00346535

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Cited by:
  1. Celso Nunes, 2008. "Poverty Measurement: The Development of Different Approaches and Its Techniques," Working Papers 93, ECINEQ, Society for the Study of Economic Inequality.
  2. Razzolini, Tiziano & Leombruni, Roberto & Mastrobuoni, Giovanni & Pagliero, Mario, 2013. "Beneath the Surface: The Decline in Gender Injury Gap," IZA Discussion Papers 7849, Institute for the Study of Labor (IZA).
  3. Joachim R. Frick & Jan Goebel, 2005. "Regional Income Stratification in Unified Germany Using a Gini Decomposition Approach," Discussion Papers of DIW Berlin 540, DIW Berlin, German Institute for Economic Research.
  4. Angela Fiedler & Nicola Fuchs-Schündeln, 2011. "Die ungleiche Entwicklung der Ungleichheit in Deutschland seit der Wiedervereinigung," ifo Dresden berichtet, Ifo Institute for Economic Research at the University of Munich, vol. 18(03), pages 24-32, 06.
  5. Bauer, Thomas & Bender, Stefan, 2001. "Flexible Wages Systems and the Structure of Wages: Evidence from Matched Employer-Employee Data," CEPR Discussion Papers 2980, C.E.P.R. Discussion Papers.
  6. Martin Biewen, 2005. "The Covariance Structure of East and West German Incomes and its Implications for the Persistence of Poverty and Inequality," German Economic Review, Verein für Socialpolitik, vol. 6(4), pages 445-469, November.
  7. Usamah Fayez Al-Farhan, 2010. "A Detailed Decomposition of Changes in Wage Inequality in Reunified Post-transition Germany 1999-2006: Accounting for Sample Selection," SOEPpapers on Multidisciplinary Panel Data Research 269, DIW Berlin, The German Socio-Economic Panel (SOEP).
  8. Dirk Krüger, 2009. "Inequality Trends for Germany in the Last Two Decades: A Tale of Two Countries," MEA discussion paper series 09184, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  9. Fortin, Nicole & Lemieux, Thomas & Firpo, Sergio, 2011. "Decomposition Methods in Economics," Handbook of Labor Economics, Elsevier.
  10. David Black & Yi-Ping Tseng & Roger Wilkins, 2009. "Examining the Role of Demographic Change in the Decline in Male Employment in Australia: A Propensity Score Re-weighting Decomposition Approach," Melbourne Institute Working Paper Series wp2009n24, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  11. Bauer, Thomas K. & Bender, Stefan, 2001. "Flexible Work Systems and the Structure of Wages: Evidence from Matched Employer-Employee Data," IZA Discussion Papers 353, Institute for the Study of Labor (IZA).
  12. Biewen, Martin, 2012. "Additive Decompositions with Interaction Effects," IZA Discussion Papers 6730, Institute for the Study of Labor (IZA).
  13. Mary C. Daly & Robert G. Valletta, 2000. "Inequality and poverty in the United States: the effects of changing family behavior and rising wage dispersion," Working Paper Series 2000-06, Federal Reserve Bank of San Francisco.

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