Inequality and Panel Income Changes: Conditions for Possibilities and Impossibilities

Robert Duval Hernández (), Gary Fields () and George H. Jakubson ()
Additional contact information
Robert Duval Hernández: Open University of Cyprus
George H. Jakubson: Cornell University
Authors registered in the RePEc Author Service: Robert Duval-Hernandez

No 13179, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The question of who benefits from economic growth is usually assessed by using cross section data to calculate changes in income inequality. An alternative is to assess patterns of panel income changes. We derive theoretical conditions reconciling changes in inequality together with various measures of convergent/divergent panel income changes. For a large number of inequality indices, as well as for Lorenz curves: we show that rising inequality can coexist with convergent panel changes provided the latter are "large" (and in the right direction), where the meaning of "large" varies depending on the particular regression under analysis; we show that it is impossible to have both falling inequality together with divergent panel income changes in shares or in proportions; and we establish a condition linking convergence/divergence in dollars to changes in the coefficient of variation.

Keywords: income inequality; economic mobility; panel income changes (search for similar items in EconPapers)
JEL-codes: D63 J31 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2020-04
New Economics Papers: this item is included in nep-ltv and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published - published as 'Inequality and Panel Income Changes: Conditions for Possibilities and Impossibilities' in: International Economic Review, 2023, 64 (1), 295-324.

Downloads: (external link)
https://docs.iza.org/dp13179.pdf (application/pdf)

Related works:
Working Paper: Inequality and Panel Income Changes: Conditions for Possibilities and Impossibilities (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp13179

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().