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The Sensitivity of Distributional Measures to the Income Reference Period

Author

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  • Carsten Schröder

    (University of Kiel and Kiel Institute for the World Economy)

Abstract

The Income Reference Period (IRP), the measurement period of income, differs across micro-economic databases of household or individual incomes; typically it is a year, a quarter (of a year) or a month. The length of the IRP affects the shape of the income distribution and derived distributional indices, such as the Gini index. Using employment histories of German residents, this study explores the sensitivity of distributional measures to the IRP. Estimates from annual, quarterly, and monthly distributions are provided for the period from 1991-2006. Our results show that a uniform measurement period of income is a requirement for the validity of distributional analyses.

Suggested Citation

  • Carsten Schröder, 2012. "The Sensitivity of Distributional Measures to the Income Reference Period," Journal of Income Distribution, Ad libros publications inc., vol. 21(2), pages 77-115, June.
    • Handle: RePEc:jid:journl:y:2012:v:21:i:2:p:77-115
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    File URL: http://pi.library.yorku.ca/ojs/index.php/jid/article/viewFile/35689/33751
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    Cited by:

    1. Schröder, Carsten & Golan, Yolanda & Yitzhaki, Shlomo, 2014. "Inequality and the time structure of earnings: Evidence from Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 12(3), pages 349-409.

    More about this item

    Keywords

    inequality; poverty; mobility; measurement period of income; monthly; quarterly; and annual distributions; earnings; Germany;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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