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Older or wealthier? The impact of age adjustments on the wealth inequality ranking of countries

Ingvild Almås () and Magne Mogstady ()
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Magne Mogstady: Statistics Norway

No 113, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: Differences in individual wealth holdings are widely viewed as a driving force of economic inequality. However, as this finding relies on cross-section data, we may confuse older with wealthier. We propose a new method to adjust for age effects in cross-sections, which eliminates transitory wealth inequality due to age, yet preserves inequality arising from other factors. This new method is superior to existing methods, like the much used Paglin-Gini, which is shown to have several problems. A new cross-country comparable database reveals that the choice of method is empirically important: Existing methods yield erroneous wealth inequality rankings of countries.

Keywords: Wealth inequality; Life cycle; Age adjustments; Gini coeffcient. (search for similar items in EconPapers)
JEL-codes: D31 D63 D91 E21 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2009
New Economics Papers: this item is included in nep-age and nep-dev
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http://www.ecineq.org/milano/WP/ECINEQ2009-113.pdf (application/pdf)

Related works:
Working Paper: Older or Wealthier?: The Impact of Age Adjustments on the Wealth Inequality Ranking of Countries (2009) Downloads
Working Paper: Older or Wealthier? The Impact of Age Adjustments on the Wealth Inequality Ranking of Countries (2009) Downloads
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