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Income Stratification and Income Inequality

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  • Yitzhaki, Shlomo
  • Lerman, Robert I

Abstract

This paper develops a new index of stratification that highlights the distinction between inequality and stratification. The stratification index captures the extent to which population subgroups occupy disctinct strata within an overall distribution. The indices are group specific and control for group size. A weighted sum of group stratification indices is the third term that, together with between-group inequality and a weighted sum of within-group inequality adds to the overall Gini index of inequality. The paper applies the indices and the decomposition to income inequality by etnic groups in Israel and by race and family type groups in the U.S. Copyright 1991 by The International Association for Research in Income and Wealth.

Suggested Citation

  • Yitzhaki, Shlomo & Lerman, Robert I, 1991. "Income Stratification and Income Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(3), pages 313-329, September.
  • Handle: RePEc:bla:revinw:v:37:y:1991:i:3:p:313-29
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