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Fast Development With a Stable Income Distribution: Taiwan, 1979–94

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  • F. Bourguignon
  • M. Fournier
  • M. Gurgand

Abstract

This paper studies the mechanisms underlying the apparent stability of the income distribution in Taiwan. An original decomposition method based on micro‐simulation techniques is proposed. Applied to the distribution of income in Taiwan since 1979, it permits isolating the respective impact of changes in: (a) the earning structure; (b) labor‐force participation behavior; and (c) the socio‐demographic structure of the population. The stability of the distribution in Taiwan appears as the result of various structural forces which happened to offset each other. The small drop observed in the inequality of individual earnings resulted from the combination of unequalizing changes in the wage structure and the effects of changes in female labor‐force participation as well as in the educational structure of the population. However, the same offsetting forces, together with changes in the composition of households, resulted in a small increase in the inequality of the distribution of equivalized household income.

Suggested Citation

  • F. Bourguignon & M. Fournier & M. Gurgand, 2001. "Fast Development With a Stable Income Distribution: Taiwan, 1979–94," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(2), pages 139-163, June.
    • Handle: RePEc:bla:revinw:v:47:y:2001:i:2:p:139-163
    DOI: 10.1111/1475-4991.00009
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    Cited by:

    1. Ragayah Haji Mat Zin, 2005. "Income Distribution in East Asian Developing Countries: recent trends," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 19(2), pages 36-54, November.
    2. Cathal O’Donoghue & Denisa M Sologon & Iryna Kyzyma & John McHale, 2021. "A Microsimulation Analysis of the Distributional Impact over the Three Waves of the COVID-19 Crisis in Ireland," International Journal of Microsimulation, International Microsimulation Association, vol. 14(2), pages 81-105.
    3. Keogh-Brown, Marcus & McDonald, Scott & Edmunds, W. John & Beutels, Philippe & Smith, Richard D., 2008. "The macroeconomic costs of a global influenza pandemic," Conference papers 331699, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Alaba, Olumuyiwa, 2006. "EU-ECOWAS EPA: Regional Integration, Trade Facilitation and Development in West Africa," Conference papers 331477, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Malte Luebker, 2014. "Income Inequality, Redistribution, and Poverty: Contrasting Rational Choice and Behavioral Perspectives," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(1), pages 133-154, March.
    6. Camara, Alhassane & Savard, Luc, 2023. "Impact of agricultural input subsidy policy on market participation and income distribution in Africa: A bottom-up/top-down approach," Economic Modelling, Elsevier, vol. 129(C).
    7. Brigitte Dormont & Carine Milcent, 2010. "Innovation Diffusion under Budget Constraints: Microeconometric Evidence on Heart Attack in France," NBER Chapters, in: Contributions in Memory of Zvi Griliches, pages 697-726, National Bureau of Economic Research, Inc.
    8. Maurizio Bussolo & Rafael E De Hoyos & Denis Medvedev, 2010. "Economic growth and income distribution: linking macro-economic models with household survey data at the global level," International Journal of Microsimulation, International Microsimulation Association, vol. 3(1), pages 92-103.
    9. Mulubrhan Amare & Bekele Shiferaw & Hiroyuki Takeshima & George Mavrotas, 2021. "Variability in agricultural productivity and rural household consumption inequality: Evidence from Nigeria and Uganda," Agricultural Economics, International Association of Agricultural Economists, vol. 52(1), pages 19-36, January.
    10. Cathal O'Donoghue & Denisa M. Sologon & Iryna Kyzyma & John McHale, 2020. "Modelling the Distributional Impact of the COVID‐19 Crisis," Fiscal Studies, John Wiley & Sons, vol. 41(2), pages 321-336, June.
    11. John Creedy & Norman Gemmell & Nicolas Hérault & Penny Mok, 2020. "A microsimulation analysis of marginal welfare-improving income tax reforms for New Zealand," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(2), pages 409-434, April.
    12. Ebo Botchway & Kofi Fred Asiedu, 2020. "Ownership type and earnings gap decomposition: Evidence from the Ghanaian labor market," African Development Review, African Development Bank, vol. 32(4), pages 619-631, December.
    13. Utpal Kumar De & Loitongbam Hena Devi, 2023. "Inequality Dynamics in Urban Manipur, India: A Decomposition Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 167(1), pages 67-89, June.
    14. Shao-Hsun Keng & Peter F. Orazem, 2019. "Performance pay, the marriage market and rising income inequality in Taiwan," Review of Economics of the Household, Springer, vol. 17(3), pages 969-992, September.
    15. Daniel L. Hicks & Beatriz Maldonado & Brian Piper & Alejandra Goytia Rios, 2018. "Identity, Patronage, and Redistribution: Economic Inequality in Bolivia under Evo Morales," Journal of Economics, Race, and Policy, Springer, vol. 1(1), pages 26-41, July.
    16. O'Donoghue, Cathal & M. Sologon, Denisa & Kyzyma, Iryna & McHale, John, 2020. "Modelling the distributional impact of the Covid-19 crisis in Ireland," Centre for Microsimulation and Policy Analysis Working Paper Series CEMPA4/20, Centre for Microsimulation and Policy Analysis at the Institute for Social and Economic Research.
    17. Stephan Klasen & Thomas Otter & Carlos Villalobos Barria, 2012. "The Dynamics of Inequality Change in a Highly Dualistic Economy: Honduras, 1991-2007," WIDER Working Paper Series wp-2012-017, World Institute for Development Economic Research (UNU-WIDER).
    18. Bart Capéau & André Decoster & Stijn Van Houtven, 2024. "Piecemeal Modeling of the Effects of Joint Direct and Indirect Tax Reforms," Public Finance Review, , vol. 52(1), pages 111-149, January.
    19. Brocker, Johannes, 2005. "Necessary and unnecessary parameter restrictions for CDES demand systems," Conference papers 331358, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    20. Bouët, Antoine & Estrades, Carmen & Laborde, David, 2012. "Cooperation vs. non cooperation in the multilateral trading system: the impact on poverty and inequality in developing countries," Conference papers 332287, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    21. Antoine de Mahieu, 2021. "In-work Benefits in Belgium: Effects on Labour Supply and Welfare," International Journal of Microsimulation, International Microsimulation Association, vol. 14(1), pages 43-72.
    22. Sylvanus Gaku, 2022. "Understanding Ghana’s Expenditure Inequality," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(3), pages 1463-1480, December.
    23. O'Donoghue, Cathal & Sologon, Denisa Maria, 2023. "The Transformation of Public Policy Analysis in Times of Crisis – A Microsimulation-Nowcasting Method Using Big Data," IZA Discussion Papers 15937, Institute of Labor Economics (IZA).

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