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History dependent growth incidence: A characterisation and an application to the economic crisis in Italy

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Author Info

  • Flaviana Palmisano

    ()
    (University of Bari and UAB (Barcelona))

  • Dirk Van de gaer

    ()
    (Sherppa (Ghent University), IAE (CSIC Barcelona) and CORE (Louvain la Neuve).)

Abstract

We propose a characterisation of an aggregate measure of growth that takes into account the initial economic conditions of individuals. Our measure is a weighted average of individual income growth with weights that are decreasing with the rank of the individual in the initial income distribution. We apply our theoretical framework to evaluate the growth processes experienced by the Italian population in the last decade and find that the 2008-2010 crisis deteriorated the income growth of the initially poor disproportionately. This is compatible with the dual nature of the Italian labour market.

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Bibliographic Info

Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 314.

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Length: 32 pages
Date of creation: Nov 2013
Date of revision:
Handle: RePEc:inq:inqwps:ecineq2013-314

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Related research

Keywords: Individual income growth; directional income mobility; pro-poor growth; economic crisis.;

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References

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  1. Ivan Faiella & Romina Gambacorta, 2007. "The Weighting Process in the SHIW," Temi di discussione (Economic working papers) 636, Bank of Italy, Economic Research and International Relations Area.
  2. DEMUYNCK, Thomas & VAN DE GAER, Dirk, . "Inequality adjusted income growth," CORE Discussion Papers RP -2505, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Massimo Baldini & Stefano Toso & Paolo Bosi, 2002. "Targeting welfare in Italy: old problems and perspectives on reform," Fiscal Studies, Institute for Fiscal Studies, vol. 23(1), pages 51-75, March.
  4. Kolm, Serge-Christophe, 1976. "Unequal inequalities. II," Journal of Economic Theory, Elsevier, vol. 13(1), pages 82-111, August.
  5. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January.
  6. Grosse, Melanie & Harttgen, Kenneth & Klasen, Stephan, 2008. "Measuring Pro-Poor Growth in Non-Income Dimensions," World Development, Elsevier, vol. 36(6), pages 1021-1047, June.
  7. Tullio Jappelli & Luigi Pistaferri, 2010. "Does Consumption Inequality Track Income Inequality in Italy?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 133-153, January.
  8. HILDEBRAND Vincent & PI ALPERIN Maria Noel & VAN KERM Philippe, 2012. "Measuring and accounting for the deprivation gap of Portuguese immigrants in Luxembourg," CEPS/INSTEAD Working Paper Series 2012-33, CEPS/INSTEAD.
  9. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
  10. B. Essama-Nssah & Peter J. Lambert, 2009. "Measuring Pro-Poorness: A Unifying Approach With New Results," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(3), pages 752-778, 09.
  11. Fields, Gary S & Ok, Efe A, 1999. "Measuring Movement of Incomes," Economica, London School of Economics and Political Science, vol. 66(264), pages 455-71, November.
  12. Massimo Baldini & Daniele Pacifico, 2009. "The recent reforms of the Italian personal income tax: distributive and efficiency effects," Department of Economics 0611, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
  13. Anthony B. Atkinson & Andrea Brandolini, 2009. "On analysing the world distribution of income," Temi di discussione (Economic working papers) 701, Bank of Italy, Economic Research and International Relations Area.
  14. Son, Hyun Hwa, 2004. "A note on pro-poor growth," Economics Letters, Elsevier, vol. 82(3), pages 307-314, March.
  15. Bossert, Walter, 1990. "An axiomatization of the single-series Ginis," Journal of Economic Theory, Elsevier, vol. 50(1), pages 82-92, February.
  16. Michael Grimm, 2005. "Removing the anonymity axiom in assessing pro-poor growth," Ibero America Institute for Econ. Research (IAI) Discussion Papers 113, Ibero-America Institute for Economic Research.
  17. Kraay, Aart, 2006. "When is growth pro-poor? Evidence from a panel of countries," Journal of Development Economics, Elsevier, vol. 80(1), pages 198-227, June.
  18. Flaviana Palmisano & Flaviana Palmisano, 2012. "The distributional incidence of growth: a non-anonymous and rank dependent approach," series 0039, Dipartimento di Scienze Economiche e Metodi Matematici - Università di Bari, revised Jul 2012.
  19. Nanak Kakwani & Hyun H. Son, 2008. "Poverty Equivalent Growth Rate," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(4), pages 643-655, December.
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Cited by:
  1. Markus Jantti & Stephen P. Jenkins, 2014. "Income Mobility," Working Papers 319, ECINEQ, Society for the Study of Economic Inequality.

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