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A Review of Decomposition of Income Inequality

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  • Heshmati, Almas

    () (Sogang University)

Abstract

This paper is a review of recent developments of parametric and non-parametric approaches to decompose inequality by subgroups, income sources, causal factors and other unit characteristics. Different methods of decomposing changes in poverty into growth, redistribution, poverty standard and residual components are described. In parametric approaches the dynamics of income accounting for transitory and permanent changes in individual and household earnings conditional of various covariates are also reviewed. Statistical inferences for inequality measurement including delta and bootstrapping and other methods to provide estimates of the sampling distribution are presented. These issues are important in the design of policy measures and expectations about their impacts on earnings inequality and poverty reductions.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1221.

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Length: 29 pages
Date of creation: Jul 2004
Date of revision:
Handle: RePEc:iza:izadps:dp1221

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Keywords: income inequality; poverty; decomposition; parametric; non-parametric; Gini index;

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References

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Citations

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Cited by:
  1. Heshmati, Almas, 2004. "Continental and Sub-Continental Income Inequality," IZA Discussion Papers 1271, Institute for the Study of Labor (IZA).
  2. Vesselin Mintchev & Venelin Boshnakov & Alexander Naydenov, 2010. "Sources of Income Inequality: Empirical Evidence from Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 39-64.
  3. Heshmati, Almas, 2004. "Data Issues and Databases Used in Analysis of Growth, Poverty and Economic Inequality," IZA Discussion Papers 1263, Institute for the Study of Labor (IZA).
  4. Heshmati, Almas, 2004. "Regional Income Inequality in Selected Large Countries," IZA Discussion Papers 1307, Institute for the Study of Labor (IZA).
  5. Su, Biwei & Heshmati, Almas, 2011. "Analysis of Gender Wage Differential in China's Urban Labor Market," IZA Discussion Papers 6252, Institute for the Study of Labor (IZA).

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