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Explaining the Equalising Effect of Panel-Income Changes

Author

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  • Herault Nicolas

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Melbourne, Victoria 3010, Australia)

Abstract

Panel-income changes tend to be equalising but existing approaches provide little insight on the nature of this equalising process. I present a new decomposition framework showing explicitly how the equalising effect of panel-income changes depends on the respective size and distribution of panel-income gains and losses. One of the new insights gained from the application to US data for the 1970/2009 period is that most of the equalising effect occurs through income gains rather than income losses even in times of recession.

Suggested Citation

  • Herault Nicolas, 2016. "Explaining the Equalising Effect of Panel-Income Changes," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(3), pages 1599-1609, September.
    • Handle: RePEc:bpj:bejeap:v:16:y:2016:i:3:p:1599-1609:n:14
    DOI: 10.1515/bejeap-2016-0025
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    More about this item

    Keywords

    income inequality; income mobility; income growth; panel-income changes; inequality decomposition;
    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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