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Baby Booming Inequality? Demographic Change and Inequality in Norway, 1967{2004

Author

Listed:
  • Almås, Ingvild

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Havnes, Tarjei

    (University of Oslo)

  • Mogstad, Magne

    (Statistics Norway)

Abstract

We demonstrate how age-adjusted inequality measures can be used to evaluate whether changes in inequality over time are because of changes in the age structure. In particular, we explore the hypothesis that the substantial rise in earnings inequality since the early 1980s is driven by the large baby boom cohorts approaching the peak of the age{earnings pro le. Using administrative data on earnings for every Norwegian male over the period 1967{2004, we nd that the impact of age adjustments on the trend in inequality is highly sensitive to the method used:while the most widely used age-adjusted inequality measure indicates that the rise in inequality in the 1980s and 1990s is indeed driven partly by the baby boom, a new and improved age-adjusted measure indicates the opposite, namely that the rise in inequality was even larger than what the inequality measures unadjusted for age reveal.

Suggested Citation

  • Almås, Ingvild & Havnes, Tarjei & Mogstad, Magne, 2011. "Baby Booming Inequality? Demographic Change and Inequality in Norway, 1967{2004," Discussion Paper Series in Economics 6/2010, Norwegian School of Economics, Department of Economics.
  • Handle: RePEc:hhs:nhheco:2010_006
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    References listed on IDEAS

    as
    1. Ingvild Almås & Magne Mogstady, 2009. "Older or wealthier? The impact of age adjustments on the wealth inequality ranking of countries," Working Papers 113, ECINEQ, Society for the Study of Economic Inequality.
    2. Erik Fjærli & Rolf Aaberge, 2000. "Tax Reforms, Dividend Policy and Trends in Income Inequality Empirical Evidence based on Norwegian Data," Discussion Papers 284, Statistics Norway, Research Department.
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    Cited by:

    1. Rolf Aaberge & Magne Mogstad, 2011. "Robust inequality comparisons," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(3), pages 353-371, September.
    2. Ingvild Almås & Magne Mogstady, 2009. "Older or wealthier? The impact of age adjustments on the wealth inequality ranking of countries," Working Papers 113, ECINEQ, Society for the Study of Economic Inequality.

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    More about this item

    Keywords

    Inequality trend; age structure; age{earnings profile; Gini coefficient.;
    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
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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