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Distributional change: Assessing the contribution of household income sources

Iryna Kyzyma, Alessio Fusco () and Philippe Van Kerm ()

No 2019-13, LISER Working Paper Series from LISER

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.

Keywords: copula; dependence structure; factor decomposition; income sources; poverty and inequality (search for similar items in EconPapers)
JEL-codes: C14 D31 D33 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2019-10
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