From Earnings Inequality to Consumption Inequality
Orazio Attanasio (),
Gabriella Berloffa (),
Richard Blundell () and
Ian Preston ()
Economic Journal, 2002, vol. 112, issue 478, C52-C59
This paper studies the paths from inequality in earnings to inequality in household consumption. We show that careful study of the evolution of the variances and covariances of earnings and consumption within cohorts across time can identify permanent and transitory shocks. We present an application to the evolution of inequality in the United Kingdom. We extend previous results to recognise separate earnings of partners in couples. Copyright Royal Economic Society 2002.
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