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Informal Transfers in Comparisons of Income Distributions: Lessons from Rich and Middle-Income Countries

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  • Yixia Cai
  • Martin Evans

Abstract

Developing countries rely more heavily on financial transfers between private households for economic welfare. Using data from three middle income and three high income countries in the Luxembourg Income Study Database, this paper examines the effects of such transfers on within country comparison of inequality. Deducting private transfer payments from disposable income increases inequality, but effects differ by the position of donor and receiving households in the distribution, by urban or rural location and by age of household members. We conclude that considering the role of private financial transfers is crucial to income inequality analysis.

Suggested Citation

  • Yixia Cai & Martin Evans, 2019. "Informal Transfers in Comparisons of Income Distributions: Lessons from Rich and Middle-Income Countries," LIS Working papers 705, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:705
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    References listed on IDEAS

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    Cited by:

    1. Yixia Cai & Timothy Smeeding, 2019. "Deep and Extreme Child Poverty in Rich and Poor Nations: Lessons from Atkinson for the Fight Against Child Poverty," LIS Working papers 780, LIS Cross-National Data Center in Luxembourg.
    2. Yixia Cai & Timothy Smeeding, 2020. "Deep and Extreme Child Poverty in Rich and Poor Nations: Lessons from Atkinson for the Fight Against Child Poverty," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 6(1), pages 109-128, March.

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    More about this item

    Keywords

    Measurement; methodology; inequality; poverty; income distribution;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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