This paper studies the mechanisms underlying the apparent stability of the income distribution in Taiwan. An original decomposition methodology based on micro-simulation techniques is proposed. Applied to the distribution of income in Taiwan since 1979 it permits isolating the respective impact of changes in : a) earning structure ; b) labor-force participation behavior ; and c) the socio-demographic structure of the population. The stability of the distribution in Taiwan appears as the result of various structural forces which happened to offset each other. At the individual level, the small drop observed in inequality resulted from the combination of unequalizing changes in the wage structure and the effects of changes in female labor-force participation as well as changes in the educational structure of the population. The same offsetting forces, together with changes in the composition of households, resulted in a small increase in the inequality of the distribution of equivalized household income.
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Paper provided by DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number
2000-07.
Length: 30 pages Date of creation: 2000 Date of revision: Publication status: Published in Review of Income and Wealth, 2001, 47(2), pp. 139-163 Handle: RePEc:del:abcdef:2000-07
Find related papers by JEL classification: D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
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