This paper analyzes the impact of changes in macroeconomic conditions on the income distribution in Spain. Using household data from the Encuesta Continuada de Presupuestos Familiares (ECPF) from 1985 to 1996, we disentangle the effect of aggregate variables on the income distribution by estimating counterfactual densities conditional on different macroeconomic scenarios. Our empirical approach allows for a flexible relationship between the income level and two constructed indices. The first index captures the influence of individual characteristics while the second captures the role of macroeconomic variables. The contribution of each of these variables to their respective indices is estimated by a semiparametric least squares procedure. We find that although inequality displays a decreasing trend over the earlier part of the period examined, the poor performance of the Spanish economy during the early 1990's appears to have reversed this trend. We also conclude that while inflation appears to have no impact on the distribution of income for the period examined, there were important redistributive roles for unemployment, government expenditure and the level of GDP.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number
2512.
Find related papers by JEL classification: D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods
This paper has been announced in the following NEP Reports:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)