Dimensions Of Income Inequality Research Articles

Income inequality and happiness: Which inequalities matter in China?

The effect of inequality on happiness should intrigue social scientists. Of the many dimensions of income inequality, we explore four, analysing a rich data set for China. Does actual or perceived inequality have a greater effect on happiness? We find that perceptions of inequality are the more important. How broad is the reference group with which people compare themselves? They report that it is narrow; and indeed narrowly defined inequality has the greater effect on happiness. Do perceptions of the degree of fairness of inequality matter? They do, as they ameliorate the adverse effect of inequality on happiness, especially for the poorest. Is it self-centred or community-based inequality which affects happiness? Both measures have significant effects, but in opposite directions. The research and policy implications are discussed.

Income Inequality and Gender

The paper examines the role of gender in overall income inequality. Using panel data on the entire Swedish population over the 2001–2017 period, I show a large and persistent gap in income between men and women. While lower- and middle-income individuals are more likely to be women, only one of six individuals in the top 1% is female. Hence, the income gap between men and women is an important but to-date overlooked dimension of income inequality.

Globalization and Income Inequality

The deterioration of income inequality is frequently to be found among the suggested negative side-effects of globalization – ‘the rich get richer, and the poor get poorer’. How relevant is this perception? In my opinion, the question can be properly answered only after: 1) a careful overview of the dynamics of poverty at the global level, and 2) objective analyses of the changes at the various dimensions of income inequality. It is those two fields that form the basis of the research carried out in this paper, and its results suggest that associating globalization only with growing inequality is an oversimplification of the issue. Furthermore, the selective analyses of globalization’s effects – limited to a particular country or population group – are likely to result in misleading conclusions, as globalization is a multi-faceted process that entails both positive and negative effects on income inequality.

Inequality, Debt Servicing and the Sustainability of Steady State Growth

ABSTRACTWe investigate the claim that the way in which debtor households service their debts matters for macroeconomic performance. A Kaleckian growth model is modified to incorporate working households who borrow to finance consumption that is determined, in part, by the desire to emulate the consumption patterns of more affluent households. The impact of this behavior on the sustainability of the growth process is then studied by means of a numerical analysis that captures various dimensions of income inequality. When compared with previous contributions to the literature, our results show that the way in which debtor households service their debt has both quantitative and qualitative effects on the economy's macrodynamics.

Who Supports Redistribution? Subjective Income Inequality in Japan and China

Governments reduce income inequality with redistribution policies. These policies are often contentious because people who live in the same country have different preferences for redistribution. Some prefer the government to do more while others prefer the government to do less. Hence what explains the difference in preferences? Using the methodologically suitable cases of Japan and China, this paper contributes to the redistributive preference literature by proposing an alternative theory of how a person’s subjective evaluation of and experiences with income inequality—subjective income inequality—affect his/her redistributive preferences. Specifically, a person who feels that his/her country’s level of income inequality is too high is more likely to support government redistribution. But contrary to extant studies, this paper finds that a spatial locality’s level of objective income inequality does not systematically affect its citizens’ preference for redistribution. This finding has implications for redistribution policies because government policies in Japan and China—as with other countries—narrowly frame income inequality in the objective dimensions by pegging it to “objective” income inequality indices (e.g., Gini ratio), thereby ignoring the more important subjective dimensions of income inequality.

Individual Income Inequality and Its Drivers in Indonesia: A Theil Decomposition Reassessment

This article employs a Theil decomposition analysis to examine various dimensions of income inequality, using the 2007 Indonesian Family Life Survey. The empirical strategy is based on the individual-level income data—instead of group means as in the existing literature—and thus accounts for within-group dispersion of individual incomes. The decomposition exercise reveals that income inequality across education levels constitutes about 13 % of total income inequality. The urban–rural and interprovincial dimensions individually explain 6.0–6.5 %, but the contribution of income inequality by genders appears to be negligible. The findings highlight educational reform as an effective redistributive policy.

Inequality, Debt Servicing, and the Sustainability of Steady State Growth

We investigate the claim that the way in which debtor households service their debts matters for macroeconomic performance. A Kaleckian growth model is modified to incorporate working households who borrow to finance consumption that is determined, in part, by the desire to emulate the consumption patterns of more affluent households. The impact of this behavior on the sustainability of the growth process is then studied by means of a numerical analysis that captures various dimensions of income inequality. When compared to previous contributions to the literature, our results show that the way in which debtor households service their debt has both quantitative and qualitative effects on the economy’s macrodynamics.

Inequality, Debt Servicing, and the Sustainability of Steady State Growth

We investigate the claim that the way in which debtor households service their debts matters for macroeconomic performance. A standard Kaleckian growth model is modidied to incorporate working households who borrow to finance consumption that is determined, in part, by the desire to emulate the consumption patterns of more affluent households. The impact of this behavior on the sustainability of the growth process is then studied by means of a numerical analysis that captures various dimensions of income inequality. When compared to previous contributions to the literature, our results show that the way in which debtor households service their debt has both quantitative and qualitative effects on the economy's macrodynamics.

A theory of ethnic diversity and income distribution: A legislative bargaining approach

In this paper, I examine how the two dimensions of income inequality and ethnic diversity affect the formation of political coalitions and the reallocation of income. I construct a legislative bargaining model to analyze when coalitions form along the income dimension and when it forms along the ethnic dimension. The results of the model suggest that the agenda setter selects a partner with a lower aggregate income: a smaller population size and a lower income level. Further, I extend the model from a one-round to a two-round game. The extended model shows that forming an oversized coalition is a possible equilibrium outcome and is consistent with the empirical findings.

Financialization and U.S. Income Inequality, 1970–2008

Focusing on U.S. nonfinance industries, we examine the connection between financialization and rising income inequality. We argue that the increasing reliance on earnings realized through financial channels decoupled the generation of surplus from production, strengthening owners’ and elite workers’ negotiating power relative to other workers. The result was an incremental exclusion of the general workforce from revenue-generating and compensation-setting processes. Using time-series cross-section data at the industry level, we find that increasing dependence on financial income, in the long run, is associated with reducing labor’s share of income, increasing top executives’ share of compensation, and increasing earnings dispersion among workers. Net of conventional explanations such as deunionization, globalization, technological change, and capital investment, the effects of financialization on all three dimensions of income inequality are substantial. Our counterfactual analysis suggests that financialization could account for more than half of the decline in labor’s share of income, 9.6% of the growth in officers’ share of compensation, and 10.2% of the growth in earnings dispersion between 1970 and 2008.

Spatial Dimensions of Income Inequality in Nepal

This paper investigates spatial dimensions of income inequality in Nepal using unit record data from the Living Standards Measurement (LSM) survey of 1995/96. The Gini, Atkinson and generalized entropy indices are used to measure income inequality. The results reveal that per capita income inequality in Nepal is quite high. The decomposition analyses based on ecological and geographical groupings reveal that the contribution of between-region inequality component to aggregate income inequality is less than 10 per cent. Since the poor regions have aligned with social and political conflicts, the policies to reduce inter-regional income inequality should be given far higher priority than what the statistical decomposition analyses suggest. The geographical sub-division is more salient than the ecological sub-division for the understanding of inequality. The growth of income in all the geographical rural regions, except the Eastern Terai, should reduce aggregate income disparity in Nepal.

An Exploration Of The Relationship Between Changing Inequality Of Individual, Household And Regional Inequality In Australian Cities

The changes in neighbourhood income inequality noted in Gregory and Hunter (1995) indicate that significant changes in the nature of Australian cities have occurred since the mid-1970s. This paper seeks to establish that the regional dimension of income inequality is becoming a more important component of overall inequality. Furthermore, low status and high status areas are becoming increasingly homogenous with more low income households living together in low status neighbourhoods and higher income households living elsewhere. The inadequacies of the regional income data currently available means that it is difficult to explore changes in social welfare in any detail.