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The Impact of Talents and Preferences on Income Inequality

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  • Udo EBERT
  • Patrick MOYES

Abstract

Different trends in the distribution of income across countries and in the same country over time are typically observed. The general question we are interested in is to know where these inequalities come from and what explains their differences. By restricting our attention to an artisan economy with no taxation and where individuals have identical preferences but different productivities, we study the impact on the inequality of labour income of particular changes in the way productivities are allocated. Then, assuming that the distribution of productivities is fixed, we look for the modifications of the preferences that lead to a more even distribution of income. Finally, we examine the question of how simultaneous changes in preferences and in the distribution of productivities interact in shaping the distribution of labour income.

Suggested Citation

  • Udo EBERT & Patrick MOYES, 2017. "The Impact of Talents and Preferences on Income Inequality," Cahiers du GREThA (2007-2019) 2017-15, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    • Handle: RePEc:grt:wpegrt:2017-15
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    File URL: http://cahiersdugretha.u-bordeaux.fr/2017/2017-15.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Income; Inequality; Productivities; Preferences; Lorenz Dominance.;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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