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Long Run Trends in Income Inequality in the United States, UK, Sweden, Germany and Canada: A Birth Cohort View

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  • Lars Osberg

    () (Economics Department, Dalhousie University)

Abstract

This paper examines the level and distribution of equivalent after tax, after transfer money income in Canada, the United States, the UK, Germany and Sweden using micro-data from the Luxembourg Income Study from 1969/70 to 1994/95. It concentrates on inequality within and between birth cohorts. At any point in time, less than 11% of aggregate income inequality is due to intergenerational inequality. Although median income growth of different birth cohorts over the period has varied widely across countries, there has been a general trend to greater income inequality within cohorts since 1980. The five countries studied differ in the trends observed in aggregate income, poverty, polarization and income inequality. In the United States and the UK, the incomes of the top decile of each cohort have risen dramatically, but the incomes of the bottom quintile have stagnated. In Canada and Sweden both the top and bottom deciles of each cohort have experienced similar trends. Germany is an intermediate case.

Suggested Citation

  • Lars Osberg, 2003. "Long Run Trends in Income Inequality in the United States, UK, Sweden, Germany and Canada: A Birth Cohort View," Eastern Economic Journal, Eastern Economic Association, vol. 29(1), pages 121-141, Winter.
  • Handle: RePEc:eej:eeconj:v:29:y:2003:i:1:p:121-141
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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume29/V29N1P121_141.pdf
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    References listed on IDEAS

    as
    1. Lars Osberg, 1998. "Economic Insecurity," Discussion Papers 0088, University of New South Wales, Social Policy Research Centre.
    2. Osberg, Lars & Phipps, Shelley, 1993. "Labour Supply with Quantity Constraints: Estimates from a Large Sample of Canadian Workers," Oxford Economic Papers, Oxford University Press, vol. 45(2), pages 269-291, April.
    3. Burkhauser, Richard V & Smeeding, Timothy M & Merz, Joachim, 1996. "Relative Inequality and Poverty in Germany and the United States Using Alternative Equivalence Scales," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 42(4), pages 381-400, December.
    4. Paul Beaudry & David A. Green, 2000. "Cohort patterns in Canadian earnings: assessing the role of skill premia in inequality trends," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 907-936, November.
    5. Jenkins, S., 1988. "The Measurement Of Economic Inequality," Papers 170, Australian National University - Department of Economics.
    6. Paolo Figini, 1998. "Inequality Measures, Equivalence Scales and Adjustment for Household Size and Composition," Economics Technical Papers 988, Trinity College Dublin, Department of Economics.
    7. Lars Osberg & Kuan Xu, 1999. "Poverty Intensity: How Well Do Canadian Provinces Compare?," Canadian Public Policy, University of Toronto Press, vol. 25(2), pages 179-195, June.
    8. Shelley A. Phipps & Peter S. Burton, 1995. "Sharing within Families: Implications for the Measurement of Poverty among Individuals in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 28(1), pages 177-204, February.
    9. Lars Osberg & Andrew Sharpe, 2002. "International Comparisons of Trends in Economic Well-being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 58(1), pages 349-382, June.
    10. Phipps, Shelley & Garner, Thesia I, 1994. "Are Equivalence Scales the Same for the United States and Canada?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 40(1), pages 1-17, March.
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    12. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
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    14. Smeeding, Timothy M & Sullivan, Dennis H, 1998. "Generations and the Distribution of Economic Well-Being: A Cross-National View," American Economic Review, American Economic Association, vol. 88(2), pages 254-258, May.
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    Citations

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    Cited by:

    1. Aboozar Hadavand, 2017. "Misperceptions and mismeasurements: An analysis of subjective economic inequality," Working Papers 449, ECINEQ, Society for the Study of Economic Inequality.
    2. Gabriella Berloffa & Paola Villa, 2007. "Inequality across cohorts of households: evidence from Italy," Department of Economics Working Papers 0711, Department of Economics, University of Trento, Italia.
    3. Aboozar Hadavand, 2017. "Anatomy of Income Inequality in the United States: 1979-2013," LIS Working papers 686, LIS Cross-National Data Center in Luxembourg.
    4. Frenette, Marc & Green, David A. & Milligan, Kevin, 2006. "Revisiting Recent Trends in Canadian After-Tax Income Inequality Using Census Data," Analytical Studies Branch Research Paper Series 2006274e, Statistics Canada, Analytical Studies Branch.
    5. Louis Chauvel & Martin Schröder, 2014. "Generational Inequalities and Welfare Regimes," LIS Working papers 606, LIS Cross-National Data Center in Luxembourg.

    More about this item

    Keywords

    Distribution; Income; Inequality;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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