Explaining the Equalising Effect of Panel-Income Changes

Nicolas Hérault

The B.E. Journal of Economic Analysis & Policy, 2016, vol. 16, issue 3, 1599-1609

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.

Keywords: income inequality; income mobility; income growth; panel-income changes; inequality decomposition (search for similar items in EconPapers)
JEL-codes: D31 D63 (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1515/bejeap-2016-0025

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