Income Composition Inequality

Ranaldi, Marco

doi:10.31235/osf.io/365ct

Cited by 12 publications

(36 citation statements)

References 25 publications

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“…This section introduces both the method and data that we employ. To assess the link between the functional and personal distributions of income, we follow the method proposed by Ranaldi (2020), who analytically defines the concept of income composition inequality in an effort to estimate the extent to which the composition of income is unequally distributed across the population. The income composition is unequal whenever two sources of income (e.g., capital and labor) 2 are separately owned by the top and bottom of the income distribution (or vice versa).…”

Section: Methodology and Datamentioning

confidence: 99%

“…On the other hand, there is equality of income composition whenever each individual owns the same population shares of the two income sources. To measure income composition inequality, Ranaldi (2020) analytically defines the IFC index. The IFC index is constructed by means of the concentration curves for each income source.…”

Section: Methodology and Datamentioning

confidence: 99%

“…Bengtsson and Waldenström (2018) On these lines, this paper intends to determine which ideal-typical social system the Italian economy resembles by analyzing the dynamics of income composition inequality from 1989 to 2016. Further, the adoption of the methodology in Ranaldi (2020) allows us to reduce from two to one the necessary conditions for a pass-through from factor shares to income inequality. Specifically, the sign of the IFC index will determine the effect of a change in factor shares on personal income inequality.…”

Section: Background and Related Literaturementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

“…To this end, we adopt a methodology recently developed by Ranaldi (2020) to study the evolution of income composition inequality in Italy between 1989 and 2016. As proposed by Ranaldi (2020), income composition inequality can be measured through the Income Factor Concentration (IFC) index. Whenever two income sources are concentrated in the hands of the top (e.g., capital income) and bottom (e.g., labor income) of the income distribution, the IFC index indicates a high degree of income composition inequality.…”

Section: Introductionmentioning

confidence: 99%

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Poor Laborers and Rich Capitalists? On the Evolution of Income Composition Inequality in Italy 1989-2016

Iacono¹,

Ranaldi²

2020

Preprint

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We study the evolution of inequality in income composition in terms of capital and labor income in Italy between 1989 and 2016. We document a rise in the share of capital income accruing to the bottom of the distribution, whilst the top of the distribution increases its share of labor income. This implies a falling degree of income composition inequality in the period considered and, hence, the fact that Italy is moving away from being an economy composed of poor laborers and rich capitalists. This result is robust to the use of different definitions of capital and labor income. A falling degree of income composition inequality implies a weaker link between the functional and personal distributions of income. Therefore, fluctuations in the total factor shares of income are having an increasingly weaker impact on income inequality in Italy. Finally, we conceptualize a rule of thumb for policy makers seeking to reduce income inequality in the long run. This rule relates fluctuations in the total factor shares and the level of income composition inequality to the specific income source to be redistributed. (Stone Center on Socio-Economic Inequality Working Paper)

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Section: Methodology and Datamentioning

confidence: 99%

Section: Methodology and Datamentioning

confidence: 99%

Section: Background and Related Literaturementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Poor Laborers and Rich Capitalists? On the Evolution of Income Composition Inequality in Italy 1989-2016

Iacono¹,

Ranaldi²

2020

Preprint

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Capitalist systems and income inequality

Ranaldi

Milanović

2022

Journal of Comparative Economics

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The paper investigates the relationship between capitalism systems and their levels of income and compositional inequality (how the composition of income between capital and labor varies along income distribution). Capitalism may be seen to range between Classical Capitalism, where the rich have only capital income, and the rest have only labor income, and Liberal Capitalism, where many people receive both capital and labor incomes. Using a new methodology and data from 47 countries over the past 25 years, we show that higher compositional inequality is associated with higher inter-personal inequality. Nordic countries are exceptional because they combine high compositional inequality with low inter-personal inequality. We speculate on the emergence of homoploutic societies where income composition may be the same for all, but Gini inequality nonetheless high, and introduce a new taxonomy of capitalist societies.

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Inequality, living standards, and growth: two centuries of economic development in Mexico^†

Bleynat

Challú

Segal

2020

The Economic History Review

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Historical wage and income data provide both normative measures of living standards, and indicators of patterns of economic development. This study shows that, given limited historical data, median incomes are most appropriate for measuring welfare and inequality, while urban unskilled wages can be used to test dualist models of development. We present new estimates of these series for Mexico from 1800 to 2015 and find that both have historically failed to keep up with aggregate growth: GDP per worker is now over eight times higher than in the nineteenth century, while unskilled urban real wages are only 2.2 times higher, and national median incomes only 2.0 times higher. From the perspective of inequality and social welfare, our findings confirm that there is no automatic positive relationship between economic growth and rising living standards for the majority. From the perspective of development, we argue that these findings are explained by a dual economy model incorporating Lewis's assumption of a reserve army of labour, and we explain why the decline in inequality predicted by Kuznets has not occurred.

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Income Composition Inequality

Cited by 12 publications

References 25 publications

Poor Laborers and Rich Capitalists? On the Evolution of Income Composition Inequality in Italy 1989-2016

Poor Laborers and Rich Capitalists? On the Evolution of Income Composition Inequality in Italy 1989-2016

Capitalist systems and income inequality

Inequality, living standards, and growth: two centuries of economic development in Mexico^†

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Income Composition Inequality

Cited by 12 publications

References 25 publications

Poor Laborers and Rich Capitalists? On the Evolution of Income Composition Inequality in Italy 1989-2016

Poor Laborers and Rich Capitalists? On the Evolution of Income Composition Inequality in Italy 1989-2016

Capitalist systems and income inequality

Inequality, living standards, and growth: two centuries of economic development in Mexico†

Contact Info

Product

Resources

About

Inequality, living standards, and growth: two centuries of economic development in Mexico^†