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What Drives Differences in Inequality across Countries?

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  • Székely, Miguel
  • Hilgert, Marianne

Abstract

This paper presents microeconomic simulation techniques to examine what drives differences in inequality across countries. The simulation decomposes cross-country inequality differences into the importance of individual decisions, such as fertility, mating, labor force participation, and household structure, while at the same time including information on the importance of different income sources. The decomposition is applied to household survey data from 35 countries from 6 regions in the world. The empirical results provide insights into the transmission mechanisms through which inequality is generated.

Suggested Citation

  • Székely, Miguel & Hilgert, Marianne, 2000. "What Drives Differences in Inequality across Countries?," IDB Publications (Working Papers) 1339, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:1339
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    References listed on IDEAS

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    1. Michael Kremer, 1997. "How Much does Sorting Increase Inequality?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(1), pages 115-139.
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    3. Bourguignon, Francois & Chiappori, Pierre-Andre, 1992. "Collective models of household behavior : An introduction," European Economic Review, Elsevier, vol. 36(2-3), pages 355-364, April.
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    5. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
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    7. Deininger, K & Squire, L, 1996. "Measuring Income Inequality : A New Data-Base," Papers 537, Harvard - Institute for International Development.
    8. Li, Hongyi & Squire, Lyn & Zou, Heng-fu, 1998. "Explaining International and Intertemporal Variations in Income Inequality," Economic Journal, Royal Economic Society, vol. 108(446), pages 26-43, January.
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    12. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
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    Cited by:

    1. T. H. Gindling, 2003. "La Desigualdad En América Central Durante Los Años Noventa," UMBC Economics Department Working Papers 03-109, UMBC Department of Economics.
    2. World Bank, 2007. "Costa Rica Poverty Assessment : Recapturing Momentum for Poverty Reduction," World Bank Publications - Reports 7678, The World Bank Group.
    3. Souza, Pedro H.G.F., 2013. "The Decline in Inequality In Brazil, 2003-2009: The Role Of The State," Institute for Research on Labor and Employment, Working Paper Series qt33q062zj, Institute of Industrial Relations, UC Berkeley.
    4. Spinesi, Luca, 2009. "Rent-seeking bureaucracies, inequality, and growth," Journal of Development Economics, Elsevier, vol. 90(2), pages 244-257, November.

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    More about this item

    Keywords

    simulation techniques; mating; fertility; household surveys; WP-439; income distribution; equality;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D3 - Microeconomics - - Distribution
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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