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A New Framework for the Analysis of Inequality

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Abstract

This paper presents a new framework for analyzing inequality that moves beyond the anonymity postulate. We estimate the determinants of sectoral choice and the joint distributions of outcomes across sectors. We determine which components of realized earnings variability are due to uncertainty and which components are due to components of human diversity that are forcastable by agents. Using our tools, we can determine how policies shift persons across sectors and outcome distributions across sectors.

Suggested Citation

  • Flavio Cunha & James J. Heckman, 2006. "A New Framework for the Analysis of Inequality," NBER Working Papers 12505, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:12505
    Note: DAE IFM LS CH
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    More about this item

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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