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Trends in Real Income in Britain: A Microeconomic Analysis

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  • Jenkins, Stephen P

Abstract

Trends in real national income are typically assessed using aggregate indicators such as GDP per capita, or mean household income, whereas the income distribution literature focuses on trends in income inequality. By contrast this paper takes an integrated approach to real national income measurement; it uses methods incorporating both size and distributional considerations, and applies them to household income microdata in order to measure changes in real income in the United Kingdom during the 1980s. A parametric class of decomposable real income indices is proposed which complements quasi-ordering methods such as rank and generalized dominance criteria by telling us how much real income increased over the period (if at all). The indices are also additively decomposable by population subgroup, a property which helps reveal who the gainers and losers were. The analysis also draws attention to the normative and statistical issues raised by the presence of a few very small incomes.

Suggested Citation

  • Jenkins, Stephen P, 1997. "Trends in Real Income in Britain: A Microeconomic Analysis," Empirical Economics, Springer, vol. 22(4), pages 483-500.
  • Handle: RePEc:spr:empeco:v:22:y:1997:i:4:p:483-500
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    Cited by:

    1. Manos Matsaganis & Chrysa Leventi, 2014. "Distributive Effects of the Crisis and Austerity in Seven EU Countries," ImPRovE Working Papers 14/04, Herman Deleeck Centre for Social Policy, University of Antwerp.
    2. Jenkins, Stephen P. & Van Kerm, Philippe, 2011. "Trends in individual income growth: measurement methods and British evidence," ISER Working Paper Series 2011-06, Institute for Social and Economic Research.
    3. Cowell, Frank A. & Jenkins, Stephen P., 2000. "Estimating welfare indices: household weights and sample design," ISER Working Paper Series 2000-23, Institute for Social and Economic Research.
    4. Tasneem Zafar & Alfons J. Weichenrieder, 2011. "Evaluating Real World Income Distributions behind the Veil of Ignorance - How Risk Averse do You have to be to Prefer Europe over the US?," LIS Working papers 572, LIS Cross-National Data Center in Luxembourg.
    5. Murray Leibbrandt & Laura Poswell & Pranushka & Matthew Welch & Ingrid Woolard, 2004. "Measuring recent changes in South African inequality and poverty using 1996 and 2001 census data," SALDRU/CSSR Working Papers 084, Southern Africa Labour and Development Research Unit, University of Cape Town.
    6. Carola GrĂ¼n & Stephan Klasen, 2003. "Growth, Income Distribution, and Well-Being: Comparisons across Space and Time," CESifo Working Paper Series 837, CESifo Group Munich.
    7. Stephan Klasen, 2008. "The Efficiency of Equity," Review of Political Economy, Taylor & Francis Journals, vol. 20(2), pages 257-274.
    8. Gruen, Carola & Klasen, Stephan, 2012. "Has transition improved well-being?," Economic Systems, Elsevier, vol. 36(1), pages 11-30.
    9. Francesco Devicienti & Andrea Borgarello, 2001. "Trends in the Italian Earnings Distribution, 1985-1996," LABORatorio R. Revelli Working Papers Series 2, LABORatorio R. Revelli, Centre for Employment Studies.

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