Generalised percentile ratios as robust measures of labour earnings inequality
We propose a class of generalised percentile ratios as an alternative to the P90 / P10 ratio for measuring labour earnings inequality. We show that they are more robust to sampling the variation and rounding error prevalent in interview-based surveys, as demonstrated through a Monte Carlo simulation and with Current Population Survey labour earnings data from 1987 to 2005. We find a smoother upward trend in the P90 / P10 ratio over this period than what is shown with conventionally measured P90 / P10 ratios.
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Volume (Year): 1 (2008)
Issue (Month): 2 ()
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