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What Drives Differences in Inequality Across Countries?

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  • Miguel Székely
  • Marianne Hilgert
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    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.

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    File URL: http://www.iadb.org/research/pub_hits.cfm?pub_id=WP-439&pub_file_name=pubWP-439.pdf
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    Bibliographic Info

    Paper provided by Inter-American Development Bank, Research Department in its series Research Department Publications with number 4243.

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    Date of creation: Nov 2000
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    Handle: RePEc:idb:wpaper:4243

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    1. Anthony B. Atkinson & Andrea Brandolini, 2000. "Promise and Pitfalls in the Use of 'Secondary' Data-Sets: Income Inequality in OECD Countries," Temi di discussione (Economic working papers) 379, Bank of Italy, Economic Research and International Relations Area.
    2. Raquel Fernandez & Richard Rogerson, 2000. "Sorting and Long-Run Inequality," NBER Working Papers 7508, National Bureau of Economic Research, Inc.
    3. Jeremy Greenwood & Nezih Guner & John Knowles, 2002. "More on Marriage, Fertility and the Distribution of Income," RCER Working Papers 489, University of Rochester - Center for Economic Research (RCER).
    4. Deininger, K & Squire, L, 1996. "Measuring Income Inequality : A New Data-Base," Papers 537, Harvard - Institute for International Development.
    5. Maria Cancian & Deborah Reed, 1998. "Assessing The Effects Of Wives' Earnings On Family Income Inequality," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 73-79, February.
    6. Behrman, Jere R., 1993. "Intrahousehold distribution and the family," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 4, pages 125-187 Elsevier.
    7. Carlson, Marcia & Danziger, Sheldon, 1999. "Cohabitation and the Measurement of Child Poverty," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 45(2), pages 179-91, June.
    8. Bourguignon, F. & Chiappori, P-A., 1991. "Collective Models of Household Behaviour: An Introduction," DELTA Working Papers 91-29, DELTA (Ecole normale supérieure).
    9. Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December.
    10. Kremer, M., 1996. "How Much Does Sorting Increase Inequality?," Working papers 96-18, Massachusetts Institute of Technology (MIT), Department of Economics.
    11. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
    12. 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.
    13. Behrman, Jere R & Deolalikar, Anil B, 1993. "The Intrahousehold Distribution of Market Labour Supply in Rural South India," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(4), pages 409-20, November.
    14. Mattias Lundberg & Lyn Squire, 2003. "The simultaneous evolution of growth and inequality," Economic Journal, Royal Economic Society, vol. 113(487), pages 326-344, 04.
    15. Frank A Cowell, 1996. "Family Instability, Family Incomes and Inequality," STICERD - Distributional Analysis Research Programme Papers 12, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    16. Sutherland, H., 1996. "Households, Individuals and the Re-Distribution of Income," Cambridge Working Papers in Economics 9614, Faculty of Economics, University of Cambridge.
    17. 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 410-42, June.
    18. Haurin, Donald R & Hendershott, Patric H & Kim, Dongwook, 1993. "The Impact of Real Rents and Wages on Household Formation," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 284-93, May.
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    Cited by:
    1. repec:idb:brikps:14218 is not listed on IDEAS
    2. T. H. Gindling, 2003. "La Desigualdad En América Central Durante Los Años Noventa," UMBC Economics Department Working Papers 03-109, UMBC Department of Economics.
    3. Leonardo Gasparini & Francisco Haimovich & Hernán Winkler, 2006. "Distribución del Ingreso en América Latina: Explorando las Diferencias entre Países," CEDLAS, Working Papers 0034, CEDLAS, Universidad Nacional de La Plata.
    4. Francisco Haimovich, 2010. "Distribucion del Ingreso en América Latina: Caracterización de las Diferencias entre Países," Department of Economics, Working Papers 080, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata.

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