(Translated by https://www.hiragana.jp/)
The Measurement Of Income Distribution Dynamics When Demographics Are Correlated With Income
IDEAS home Printed from https://ideas.repec.org/a/bla/revinw/v53y2007i2p246-274.html
   My bibliography  Save this article

The Measurement Of Income Distribution Dynamics When Demographics Are Correlated With Income

Author

Listed:
  • Denis Cogneau
  • Michael Grimm

Abstract

We show how to account for differentials in demographic variables, in particular mortality, when performing welfare comparisons over time. The idea is to apply various ways of “correcting” estimated income distribution measures for “sample selection” due to differential mortality. We distinguish the direct effect of mortality, i.e. individuals who die leave the population and no longer contribute to monetary welfare, from the indirect effect, i.e. the impact on survivors in the deceased's household who may experience a decrease or increase in monetary welfare. In the case of Indonesia, we show that the direct and indirect effects of mortality on income distribution have opposite signs, but are roughly the same in magnitude. Moreover, the effects of other demographic changes dominate the effects of mortality, whether direct or indirect. However, in the post‐crisis period these demographic changes also explain a substantial part of the overall change in the distribution of income.

Suggested Citation

  • Denis Cogneau & Michael Grimm, 2007. "The Measurement Of Income Distribution Dynamics When Demographics Are Correlated With Income," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(2), pages 246-274, June.
    • Handle: RePEc:bla:revinw:v:53:y:2007:i:2:p:246-274
    DOI: 10.1111/j.1475-4991.2007.00229.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1475-4991.2007.00229.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1475-4991.2007.00229.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Angus S. Deaton & Christina Paxson, 2001. "Mortality, Education, Income, and Inequality among American Cohorts," NBER Chapters, in: Themes in the Economics of Aging, pages 129-170, National Bureau of Economic Research, Inc.
    2. Sergio Firpo, 2007. "Efficient Semiparametric Estimation of Quantile Treatment Effects," Econometrica, Econometric Society, vol. 75(1), pages 259-276, January.
    3. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-1044, September.
    4. Lam, David, 1986. "The Dynamics of Population Growth, Differential Fertility, and Inequality," American Economic Review, American Economic Association, vol. 76(5), pages 1103-1116, December.
    5. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    6. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    7. Blackorby, Charles & Bossert, Walter & Donaldson, David, 1995. "Intertemporal Population Ethics: Critical-Level Utilitarian Principles," Econometrica, Econometric Society, vol. 63(6), pages 1303-1320, November.
    8. Ravi Kanbur & Diganta Mukherjee, 2007. "Premature Mortality And Poverty Measurement," Bulletin of Economic Research, Wiley Blackwell, vol. 59(4), pages 339-359, October.
    9. repec:pri:cheawb:deaton_paxson_mortality_cohorts.pdf is not listed on IDEAS
    10. M. R. Rosenzweig & Stark, O. (ed.), 1997. "Handbook of Population and Family Economics," Handbook of Population and Family Economics, Elsevier, edition 1, volume 1, number 1.
    11. Dasgupta, Partha & Sen, Amartya & Starrett, David, 1973. "Notes on the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 6(2), pages 180-187, April.
    12. Thomas, D. & Frankenberg, E. & Smith, J.P., 2000. "Lost But Not Forgotten Attribution and Follow-up in the Indonesian Family Life Survey," Papers 00-03, RAND - Labor and Population Program.
    13. Brainerd, Elizabeth & Siegler, Mark V, 2003. "The Economic Effects of the 1918 Influenza Epidemic," CEPR Discussion Papers 3791, C.E.P.R. Discussion Papers.
    14. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931, December.
    15. Alberto Abadie & Joshua D. Angrist & Guido W. Imbens, 1998. "Instrumental Variables Estimation of Quantile Treatment Effects," NBER Technical Working Papers 0229, National Bureau of Economic Research, Inc.
    16. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    17. repec:pri:cheawb:deaton_paxson_mortality_cohorts is not listed on IDEAS
    18. Blackorby, Charles & Donaldson, David, 1984. "Social criteria for evaluating population change," Journal of Public Economics, Elsevier, vol. 25(1-2), pages 13-33, November.
    19. Chu, C Y Cyrus & Koo, Hui-Wen, 1990. "Intergenerational Income-Group Mobility and Differential Fertility," American Economic Review, American Economic Association, vol. 80(5), pages 1125-1138, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Petra Enß & Robert Schwager, 2006. "Kommunaler Finanzausgleich und Gewerbesteuerhebesätze in Niedersachsen," Departmental Discussion Papers 127, University of Goettingen, Department of Economics.
    2. Renate Ohr, 2009. "European Monetary Union at Ten: Had the German Maastricht Critics Been Wrong?," Departmental Discussion Papers 141, University of Goettingen, Department of Economics.
    3. Corinna Ahlfeld, 2009. "The scapegoat of heterogeneity - How fragmentation influences political decisionmaking," Departmental Discussion Papers 143, University of Goettingen, Department of Economics.
    4. Michael Grimm, 2006. "Mortality and survivors'consumption," Working Papers DT/2006/13, DIAL (Développement, Institutions et Mondialisation).
    5. Borodkin, Fridrich & Bragin, Vladimir & Shpack, Maria, 2006. "Stability of Incomes Distribution in Modern Russia (1994–2004)," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 3(3), pages 17-67.
    6. Sanjaya, M Ryan, 2007. "Health cost in Indonesia: evidences from IFLS and Susenas data," MPRA Paper 13986, University Library of Munich, Germany.
    7. Alan G. Isaac, 2014. "The Intergenerational Propagation of Wealth Inequality," Metroeconomica, Wiley Blackwell, vol. 65(4), pages 571-584, November.
    8. Grimm, M., 2010. "Does inequality in health impede growth?," ISS Working Papers - General Series 19426, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    9. Sascha Wolff, 2006. "Migration und ihre Determinanten im ost-westdeutschen Kontext nach der Wiedervereinigung: Ein Literaturüberblick," Departmental Discussion Papers 130, University of Goettingen, Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:dau:papers:123456789/4456 is not listed on IDEAS
    2. Claudio Zoli, 2009. "Variable population welfare and poverty orderings satisfying replication properties," Working Papers 69/2009, University of Verona, Department of Economics.
    3. Liu, Xiying, 2015. "Optimal population and policy implications," ISU General Staff Papers 201501010800005546, Iowa State University, Department of Economics.
    4. Ferreira , Francisco H. G., 2010. "Distributions in motion: economic growth, inequality, and poverty dynamics," Policy Research Working Paper Series 5424, The World Bank.
    5. Cockburn, John & Duclos, Jean-Yves & Zabsonré, Agnès, 2014. "Is global social welfare increasing? A critical-level enquiry," Journal of Public Economics, Elsevier, vol. 118(C), pages 151-162.
    6. Francesco Andreoli & Claudio Zoli, 2020. "From unidimensional to multidimensional inequality: a review," METRON, Springer;Sapienza Università di Roma, vol. 78(1), pages 5-42, April.
    7. Srinivas Goli & Nagendra Kumar Maurya & Moradhvaj & Prem Bhandari, 2019. "Regional Differentials in Multidimensional Poverty in Nepal: Rethinking Dimensions and Method of Computation," SAGE Open, , vol. 9(1), pages 21582440198, March.
    8. James E. Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster-Greer-Thorbecke (FGT) Poverty Measures: Twenty-Five Years Later," Working Papers 2010-14, The George Washington University, Institute for International Economic Policy.
    9. Jean‐Yves Duclos & Paul Makdissi, 2004. "Restricted and Unrestricted Dominance for Welfare, Inequality, and Poverty Orderings," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 6(1), pages 145-164, February.
    10. Sreenivasan Subramanian, 2004. "Indicators of Inequality and Poverty," WIDER Working Paper Series RP2004-25, World Institute for Development Economic Research (UNU-WIDER).
    11. Alain Trannoy & John Weymark, 2007. "Dominance Criteria for Critical-Level Generalized Utilitarianism," Vanderbilt University Department of Economics Working Papers 0707, Vanderbilt University Department of Economics.
    12. Breitmeyer, Carsten & Hakenes, Hendrik & Pfingsten, Andreas, 2004. "From poverty measurement to the measurement of downside risk," Mathematical Social Sciences, Elsevier, vol. 47(3), pages 327-348, May.
    13. John COCKBURN & Jean-Yves DUCLOS & Agnès ZABSONRÉ, 2011. "Is the value of humanity increasing? A critical-level enquiry," Working Papers I13, FERDI.
    14. Rodolfo Hoffmann & Diego Camargo Botassio, 2020. "Sensitivity of inequality measures considering regressive transfers with fixed relative income distance," METRON, Springer;Sapienza Università di Roma, vol. 78(3), pages 279-296, December.
    15. Fabio Maccheroni & Pietro Muliere & Claudio Zoli, 2005. "Inverse stochastic orders and generalized Gini functionals," Metron - International Journal of Statistics, Dipartimento di Statistica, Probabilità e Statistiche Applicate - University of Rome, vol. 0(3), pages 529-559.
    16. Makdissi, Paul & Groleau, Yves, 2002. "Que pouvons-nous apprendre des profils de pauvreté canadiens?," L'Actualité Economique, Société Canadienne de Science Economique, vol. 78(2), pages 257-286, Juin.
    17. James Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster–Greer–Thorbecke (FGT) poverty measures: 25 years later," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(4), pages 491-524, December.
    18. Walter Bossert & Susumu Cato & Kohei Kamaga, 2022. "Generalized Poverty-gap Orderings," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(1), pages 189-215, November.
    19. Allanson, Paul & Hubbard, Lionel, 1999. "On the Comparative Evaluation of Agricultural Income Distributions in the European Union," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 26(1), pages 1-17, March.
    20. Victor Chernozhukov & Iván Fernández‐Val & Blaise Melly, 2013. "Inference on Counterfactual Distributions," Econometrica, Econometric Society, vol. 81(6), pages 2205-2268, November.
    21. Belhadj, Besma & Limam, Mohamed, 2012. "Unidimensional and multidimensional fuzzy poverty measures: New approach," Economic Modelling, Elsevier, vol. 29(4), pages 995-1002.

    More about this item

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:revinw:v:53:y:2007:i:2:p:246-274. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/iariwea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.