The Sensitivity of Distributional Measures to the Income Reference Period

Carsten Schröder

Journal of Income Distribution, 2012, vol. 21, issue 2, 77-115

Abstract: The Income Reference Period (IRP), the measurement period of income, differs across micro-economic databases of household or individual incomes; typically it is a year, a quarter (of a year) or a month. The length of the IRP affects the shape of the income distribution and derived distributional indices, such as the Gini index. Using employment histories of German residents, this study explores the sensitivity of distributional measures to the IRP. Estimates from annual, quarterly, and monthly distributions are provided for the period from 1991-2006. Our results show that a uniform measurement period of income is a requirement for the validity of distributional analyses.

Keywords: inequality, poverty, mobility, measurement period of income; monthly, quarterly, and annual distributions, earnings, Germany (search for similar items in EconPapers)
JEL-codes: D1 D31 I32 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (1)

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