Income Distribution Statistics Research Articles

Life Course Perspective on Economic Shocks and Income Inequality Through Age‐Period‐Cohort Analysis: Evidence From Finland

Utilizing age‐period‐cohort analysis, this paper examines the development of income distribution across periodic economic fluctuations in relation to cohorts and age groups. The empirical analysis is based on the Finnish Income Distribution Statistics and Household Expenditure Surveys covering the period of 1966–2015. The findings suggest that the period and cohort effects can be identified as the main effects on relative income, while the age effects have no meaningful impact when the control variables are taken into account. This result reveals a connection between the effects of economic shocks and cohort placement on labor market entry. Additionally, absolute income analysis suggests that economic shocks create stagnation points in income development, which are especially detrimental to cohorts who are transitioning into labor markets. Additionally, middle‐income attainment has not changed due to periodic shocks but rather is related to inter‐cohort inequalities and relative income differences, where the baby boomer generation is a clear winner.

Externalities of home-ownership on entrepreneurship: empirical evidence

PurposeThis study aims to examine the externalities from regional home-ownership to individual-level entrepreneurship.Design/methodology/approachThe paper links individual-level data from the Finnish Income Distribution Statistics for years 1990-1992 to regional home-ownership proportions. Probit models of entrepreneurship with regional home-ownership and appropriate control variables as regressors are estimated. A rental housing market deregulation experiment which caused exogenous variation in regions’ home-ownership is exploited to identify the causal effects on entrepreneurship.FindingsResults show that higher home-ownership in a region leads to greater entrepreneurship. Further analyses together with the fact that homeownership tends to have detrimental labour market effects suggest that homeownership encourages entrepreneurship by leading to less paid work opportunities. These results are in line with those of earlier literature that self-employment and entrepreneurship, especially during bad economic times, are partly motivated by bad employment opportunities.Originality/valueThis study presents novel results on the externalities that home-ownership has on entrepreneurship. These externalities are shown to be important enough that they need to be considered when assessing the economic effects of various policies that affect the prevalence of owner-occupied housing. The instrumental variables’ estimates are the first causal estimates in the literature and the bias resulting from assuming exogeneity is shown to be nonnegligible.

Personal Savings from Top Incomes and Household Wealth Accumulation in the United States

:This article explores the determinants and distribution of household wealth. Looking at U.S. data since 1980, it finds convincing evidence that top incomes were saved at high rates and contributed to the steady increase in the household wealth–income ratio. First, I rule out counterclaims regarding the role of housing and real estate prices finding little evidence of their influence on the trends and magnitudes of household net worth relative to disposable income. With savings as the remaining explanation, I present an accounting decomposition formula that captures savings rates for any reference group using the dynamics of intergroup accumulation rates. This methodology is applied to data from national accounts, balance sheets, and income distribution statistics in order to compute saving rates for the top 1 percent of households in the U.S. income distribution. The estimates also support the idea that top income earners have outsaved other households, thereby capturing an increasing share of wealth.

The British Household Panel Survey and its Income Data

This paper provides a self-contained introduction to the British Household Panel Survey (BHPS), concentrating on aspects relevant to analysis of the distribution of household income. I discuss BHPS design features and how data on net household income are derived. The BHPS net household income definition is modelled on that used in Britain’s official personal income distribution statistics (Households Below Average Income, HBAI). I show that cross-sectional BHPS distributions track corresponding HBAI ones relatively well over time.

Publicly provided services and the distribution of households' economic resources

Conventional income distribution statistics subtract taxes from household income but do not take into account the distributional effects of the services financed through these taxes. As many of the functions of government are available to the population free of charge or at a subsidised rate, this means that income distribution figures exaggerate the degree of inequality in the distribution of resources. This article examines the extent to which this is the case, and assesses whether statements about the relative inequality prevailing in different countries are reliable. Estimates of the impact of government services on the static distribution of household income, based on two different approaches, show that publicly-provided goods and services significantly narrow the dispersion of income inequality across countries with only small changes in the ranking of individual countries, and that the effects are larger when looking at the extremes of the distributions.

The Disconcerting Pyramids of Poverty and Inequality of Sub-Saharan Africa

Poverty and inequality in Sub-Saharan Africa (SSA) should not be ascertained only on the basis of scarce and unreliable income distribution statistics, but should also take into account conditions. Recent, widely disseminated claims that poverty and inequality have increased over the past 30 years are based on regional income estimates with falling medians and rising upper variances over that period. Graphically, this translates into pyramid-shaped income distributions that, perversely, shift to the left and widen over time. However, during the same period indicators improved significantly (if insufficiently), and we argue in this paper that such a trend represents progress with equity in SSA. This point is illustrated through the configuration of alternative social pyramids that move for most of the last 30 years in the right direction. However, more recently, indicators are being set back by the HIV/AIDS pandemic, which will generate greater and more dehumanizing poverty in the years ahead even if meaningful economic growth is achieved. As underscored by the multiplicity of pyramid representations, poverty and inequality time trends in SSA can thus best be described as disconcerting in that they remain arguably illusive and definitely disturbing.

The Disconcerting Pyramids of Poverty and Inequality of Sub-Saharan Africa

Poverty and inequality in Sub-Saharan Africa (SSA) should not be ascertained only on the basis of scarce and unreliable income distribution statistics, but should also take into account conditions. Recent, widely disseminated claims that poverty and inequality have increased over the past 30 years are based on regional income estimates with falling medians and rising upper variances over that period. Graphically, this translates into pyramid-shaped income distributions that, perversely, shift to the left and widen over time. However, during the same period indicators improved significantly (if insufficiently), and we argue in this paper that such a trend represents progress with equity in SSA. This point is illustrated through the configuration of alternative social pyramids that move for most of the last 30 years in the right direction. However, more recently, indicators are being set back by the HIV/AIDS pandemic, which will generate greater and more dehumanizing poverty in the years ahead even if meaningful economic growth is achieved. As underscored by the multiplicity of pyramid representations, poverty and inequality time trends in SSA can thus best be described as disconcerting in that they remain arguably illusive and definitely disturbing.

A dominance evaluation of Taiwan's official income distribution statistics, 1976–1992

Statistical tests for Lorenz dominance and related tests for first order dominance are applied to Taiwan's official income distribution statistics for the period 1976–1992. Inference tests for Lorenz dominance reveal whether significant changes in income inequality have occurred, while first order dominance comparisons show the effects of growth on economic well-being across time. Several conclusions emerge from the study: (1) correcting for sampling errors and considering entire income distributions leads to insights into changes in Taiwan's income distribution that are not revealed by descriptive summary statistics that are relied upon in official reports; (2) Lorenz dominance analysis reveals that, on the whole, income inequality in Taiwan has become significantly more unequal across time; (3) the so called U-shaped inequality experience is not confirmed for the 1976–1992 study period; (4) first order dominance analysis reveals highly significant improvements in the standard living in most year-to-year comparisons; and (5) whether overall social welfare has improved since 1976 depends upon the specific welfare criterion applied and the time period considered.

Exact Aggregation and the Demand for Public Goods

Extends Mäler′s notion of weak complementarity between a private good and a public good to non‐homothetic demand functions which can be exactly aggregated. Aggregate demand functions depending on private prices, public good quantities and income distribution statistics can then be used to recover the private individual demand functions which reveal an individual′s willingness to pay for public goods.

INCOME DISTRIBUTION STATISTICS IN LATIN AMERICA AND THEIR RELIABILITY

This paper is addressed to the question of how far income distribution statistics currently available in Latin America can be relied upon, either to assess the degree of inequality in the national distribution of income or to undertake comparisons between countries or over time. It gives a summary account of research carried out on Latin American data.The sources available in Latin America for estimating income distributions are discussed. Concentrating the attention on household surveys conducted in various Latin American countries, an inventory of such surveys and their characteristics is offered, along with a detailed exposition of survey methods and income concepts used for estimating household income. Methods used for assessing the representativeness of samples are summarily reviewed. The case for comparing income data from household surveys and population censuses with national accounts estimates is put forward, along with the procedures and assumptions used for carrying out such comparisons. The relative discrepancy between the two sources is taken as indicative of the degree of underestimation of each type of income in each survey. An analysis of such discrepancies across the set of surveys considered gives clues on possible underestimation biases in measuring each type of income and total household income in different types of survey and in population censuses.Differential effects on comparability of survey results call for appropriate methods of adjusting income distribution estimates to account for the missing incomes. A method for carrying out such an adjustment is applied to income distributions from a selected number of Latin American surveys. The results obtained provide an indication of how much difference it makes to use unadjusted or adjusted data to assess income concentration or to carry out comparisons over time or space.

ON THE POSSIBILITY OF MEASURING THE DISTRIBUTION OF PERSONAL INCOME

The income distribution statistics which are based on income for a single year show a far larger inequality of income than actually exists. The distribution of annual incomes differs from the distribution of lifetime income partly because of short run fluctuations because of such things as sickness, unemployment, and unusual gains, and partly because different individuals are at different points in their life cycles. The vertical distribution of income can be considered to be the distribution of lifetime income. The horizontal distribution can be considered to be the differences arising in the current period due to short run fluctuations and differences in the age‐income cycle of persons. The observed annual income distribution statistics are a mixture of the vertical and horizontal distributions. The estimation of the lifetime income distribution implies discounting, and also raises questions as to the treatment of transfers, subsidies, public investments and taxes. However, statistics based upon a mixture of the horizontal and vertical distributions of income are of no interest.

Family Income Distribution Statistics Published by Federal Agencies

Family Income Distribution Statistics Published by Federal Agencies

Family Income Distribution Statistics Published by Federal Agencies

Family Income Distribution Statistics Published by Federal Agencies