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Distributional change: Assessing the contribution of household income sources

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  • KYZYMA Iryna
  • FUSCO Alessio
  • VAN KERM Philippe

Abstract

We develop a decomposition of distributional change by factor components to quantify how changes in the association between sources of income and changes in their marginal distributions contribute to the change in the distribution of household incomes over time. The two components are further broken down to isolate the contribution of specific income sources. Application to the change in the distribution of household incomes in Luxembourg between 2004 and 2013 reveals contrasted results: increased association between spouse earnings, public transfers, and taxes depressed the income share of poor households while changes in marginal distributions increased incomes in the upper half of the distribution.

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  • KYZYMA Iryna & FUSCO Alessio & VAN KERM Philippe, 2019. "Distributional change: Assessing the contribution of household income sources," LISER Working Paper Series 2019-13, Luxembourg Institute of Socio-Economic Research (LISER).
    • Handle: RePEc:irs:cepswp:2019-13
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    More about this item

    Keywords

    copula; dependence structure; factor decomposition; income sources; poverty and inequality;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution

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