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What Drives Differences in Inequality Across Countries?

  • Miguel Székely
  • Marianne Hilgert
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    This paper presents microeconomic simulation techniques to examine what drives differences in inequality across countries. The simulation decomposes cross-country inequality differences into the importance of individual decisions, such as fertility, mating, labor force participation, and household structure, while at the same time including information on the importance of different income sources. The decomposition is applied to household survey data from 35 countries from 6 regions in the world. The empirical results provide insights into the transmission mechanisms through which inequality is generated.

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    File URL: http://www.iadb.org/research/pub_hits.cfm?pub_id=WP-439&pub_file_name=pubWP-439.pdf
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    Paper provided by Inter-American Development Bank, Research Department in its series Research Department Publications with number 4243.

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    Date of creation: Nov 2000
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    Handle: RePEc:idb:wpaper:4243
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    1. Sutherland, H., 1996. "Households, Individuals and the Re-Distribution of Income," Cambridge Working Papers in Economics 9614, Faculty of Economics, University of Cambridge.
    2. Li, Hongyi & Squire, Lyn & Zou, Heng-fu, 1998. "Explaining International and Intertemporal Variations in Income Inequality," Economic Journal, Royal Economic Society, vol. 108(446), pages 26-43, January.
    3. Greenwood, J. & Guner, N. & Knkwles, J., 1999. "More on Marriage, Fertility, and the Distribution of Income," Papers 9904, London School of Economics - Centre for Labour Economics.
    4. Maria Cancian & Deborah Reed, 1998. "Assessing The Effects Of Wives' Earnings On Family Income Inequality," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 73-79, February.
    5. Michael Kremer, 1996. "How Much Does Sorting Increase Inequality?," NBER Working Papers 5566, National Bureau of Economic Research, Inc.
    6. Carlson, Marcia & Danziger, Sheldon, 1999. "Cohabitation and the Measurement of Child Poverty," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 45(2), pages 179-91, June.
    7. Aghion, Philippe & Caroli, Eve & García-Peñalosa, Cecilia, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Scholarly Articles 12502063, Harvard University Department of Economics.
    8. Behrman, Jere R & Deolalikar, Anil B, 1993. "The Intrahousehold Distribution of Market Labour Supply in Rural South India," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(4), pages 409-20, November.
    9. Fernandez, R. & Rogerson, R., 1999. "Sorting and Long-Run Inequality," Working Papers 99-22, C.V. Starr Center for Applied Economics, New York University.
    10. Haurin, Donald R & Hendershott, Patric H & Kim, Dongwook, 1993. "The Impact of Real Rents and Wages on Household Formation," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 284-93, May.
    11. Atkinson, A.B. & Brandolini, A., 2000. "Promise and Pitfalls in the Use of 'Secondary' Data -Sets: Income Inequality in OECD Countries," Papers 379, Banca Italia - Servizio di Studi.
    12. Deininger, K & Squire, L, 1996. "Measuring Income Inequality : A New Data-Base," Papers 537, Harvard - Institute for International Development.
    13. Behrman, Jere R., 1993. "Intrahousehold distribution and the family," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 4, pages 125-187 Elsevier.
    14. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
    15. Bourguignon, F. & Chiappori, P-A., 1991. "Collective Models of Household Behaviour: An Introduction," DELTA Working Papers 91-29, DELTA (Ecole normale supérieure).
    16. Frank A Cowell, 1996. "Family Instability, Family Incomes and Inequality," STICERD - Distributional Analysis Research Programme Papers 12, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    17. Mattias Lundberg & Lyn Squire, 2003. "The simultaneous evolution of growth and inequality," Economic Journal, Royal Economic Society, vol. 113(487), pages 326-344, 04.
    18. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
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