We propose a simple and flexible framework to assess relative intergenerational mobility. The approach defines a dynasty as a parent–child pair, measuring achievement by each individual’s rank within their own generational outcome distribution, and mobility by the change in this rank across generations. This measure accommodates both continuous outcomes, such as potential earnings, and discrete or ordinal outcomes, such as education levels. It also allows for dominance characterizations (e.g., the relative progress made by women vs. men) consistent with social preferences over desirable mobility patterns. We apply the framework to Indonesia using long-panel data linking parents observed in 1993 to their children in 2014. Results show that a large share of the population escaped illiteracy—an instance of absolute mobility possibly driven by major education reforms. However, relative educational mobility was regressive, as dynasties from higher socio-economic backgrounds progressed faster. This pattern limited the overall progressivity of relative earnings mobility. Mobility in both education and potential earnings was markedly more favorable to women.
In this paper, firstly, we offer a methodological framework to assess the between-school sorting of any target group of students (grouped by either family socioeconomic status, nativity, race, ethnicity, or any other characteristic) taking into account school resources adjusted for educational needs. We develop a family of indicators, which meet several basic criteria, with which we can analyse the consequences of school segregation in terms of opportunities to learn. Secondly, we show the usefulness of this approach with a comparative analysis in Europe of the between-school sorting of students by birthplace drawing on PISA 2022. Distinguishing among students from three family backgrounds (natives, first-generation immigrants, and second-generation immigrants), we document that, in many countries, segregation is accompanied by important differences about the human resources per pupil of schools, especially when school educational needs are taken into account, which accentuates the transmission of inequality. However, not all countries share this pattern or do not do it with the same intensity.
This paper incorporates the oligopolistic product market into the Harris-Todaro general equilibrium model and investigates the impact of overlapping ownership arrangements on skilled-unskilled wage inequality. We find that, in a small open economy with full employment, overlapping ownership narrows down skilled-unskilled wage inequality; however, when the sector-biased minimum wage is implemented for unskilled labor, the impact of overlapping ownership on skilled-unskilled wage inequality is conditional. If the substitution elasticity between unskilled labor and land in the rural sector is small enough, overlapping ownership widens skilled-unskilled wage inequality; and in other cases, it narrows down skilled-unskilled wage inequality.
This study analyzes the relationship between manufacturing sector dynamics and income inequality in the United States for the period 1965Q1-2019Q4 using the Quantitative Autoregressive Distributed Lag (QARDL) model. Analyses controlled for urbanization, economic growth, and human capital variables revealed results consistent with the inverted U-shaped Kuznets curve. The key finding is that an increase in the manufacturing sector's share of employment (SCₑ) is much more effective and consistent in reducing income inequality than an increase in its share of GDP (SCₘ). For robustness analysis, the ratio of the top 10
We analyse the evolving impact of family background on educational attainment using administrative data on 2,834,777 individuals from 1,550,294 families born in the Netherlands between 1966 and 1998. We find intergenerational regression coefficients between 0.15–0.18, translating into a 1.8–2.2 month increase in educational attainment associated with a one-year increase in the attainment of a parent. Correlations between siblings explain 33 percent of the variance in educational attainment, with parental education accounting for approximately 75 percent of this share, suggesting that around one-fourth of the variance is explained by factors that are independent from parental education. Strikingly, despite pervasive changes in the distribution of educational attainment over time, the share of the variance attributable to factors shared by siblings remains stable at around 0.34. The intergenerational estimates also remain stable over the analysed period. Despite the stark reduction in overall education inequality, we conclude that family background has remained equally important for educational attainment.
This study presents a monopolistic competition model in which skilled labor exclusively participates in the intermediate goods sector, while unskilled labor is allocated to the final goods and service sectors, resulting in a unique equilibrium wage inequality. When the elasticity of substitution between capital and unskilled labor in the final-goods sector exceeds that between intermediate goods in the capital goods sector, an increase in skilled labor exacerbates wage inequality. Moreover, a certain level of goods-market competition is identified as a means to mitigate wage inequality. We establish a U-shaped relationship between wage inequality and goods-market competition, which implies that wage inequality may have intensified with the decline in goods-market competition since the 1980s.
We study the relationship between perceived income inequality and subjective well-being. Individuals are often unaware of the level of and trends in income inequality in their countries. As a result, perceived inequality may matter for subjective well-being above and beyond actual inequality measures. Leveraging data on 33 countries from the 2016 Life in Transition Survey, which includes unique information on individuals' perceived inequality changes, we find that these perceptions matter for life satisfaction. Individuals who believe that inequality has increased in the previous 4 years are on average 8
We introduce a Bayesian framework for estimating income inequality by combining household survey microdata (EU-SILC) with external top-income data (WID), using a flexible Pareto II distribution to model the upper tail. Unlike traditional methods that rely on fixed thresholds, our approach endogenizes the threshold separating the central part and the upper tail of the income distribution. The central part is modelled using a semi-parametric approach based on Bernstein polynomials, improving thus the accuracy of the likelihood and the resulting inequality estimates. Prior information on tail behaviour is incorporated through a Gamma prior on the Pareto II shape parameter, built informatively from WID data. Our results suggest that treating the threshold as uncertain and integrating external top-income data can substantially revise inequality estimates, offering a robust methodology for reconciling disparate data sources in income distribution analysis. Empirical applications to 23 EU countries in 2008 and 2018 show that incorporating external data has little impact in countries using administrative records as source for income variables in surveys (typically Nordic countries), but significantly raises Gini estimates in countries relying solely on surveys such as Germany and the UK. For countries relying on mixed sources for incomes, the impact can vary a lot. Our method provides in general more important corrections for the New Member States.
This paper examines the impact of teleworking on the gender pay gap in France using data from the French Labour Force Survey. The study explores how different frequencies of teleworking—hybrid and exclusive—affect working hours and wages for men and women and considers changes along the wage distribution. We run OLS regressions by gender and conduct an Oaxaca-Blinder decomposition. We extend this approach by using Recentered Influence Functions (RIF) at each decile for the analysis along the wage distribution. Our results show that teleworking increases the number of hours worked for women, leading to a reduction of the gender gap in working hours. However, telework potentially increases the hourly gender pay gap as men are rewarded more than women for teleworking. This pay disadvantage is greatest for women who telework exclusively and at the higher end of the wage distribution. Nevertheless, we find evidence that telework has the potential to reduce the gender pay gap at the lower end of the wage distribution for hybrid working models, where women benefit more than men from telework.
This paper develops a theoretical framework for evaluating poverty-reducing tax policies in endowment economies. Using a comprehensive class of poverty measures, we characterize the complete set of tax schedules that reduce both absolute and relative poverty, regardless of the underlying distribution of income or wealth. Our main theorems establish necessary and sufficient conditions for universal poverty reduction through taxation. For relative poverty reduction, we show that tax schedules must preserve ranks and exhibit average-rate progressivity among the poor, while maintaining the non-poor status of all individuals. Absolute poverty reduction requires these conditions plus the additional requirement that tax liabilities be non-decreasing among the poor. These results provide insights into effective tax policy design for poverty alleviation.
This article provides a review of the book “Multidimensional Well-Being, Deprivation and Inequality”, by P. K. Pattanaik and Y. Xu, whose main objective is to explore in detail several analytical and practical issues raised by the functioning and capability approach (FCA) to well-being measurement.
Previous research highlights the persistence of social norms, but it remains unclear whether they can change in the short run. Using survey data from Sweden and Denmark, I test whether local shocks can quickly shift gender social norms. On November 24, 2017, Sweden was shocked by sexual harassment allegations against Jean-Claude Arnault, sparking widespread discussions on gender-related violence. Using a Regression Discontinuity in Time design, I find a sharp improvement in Swedish normative opinions towards women’s rights, with no significant change in Denmark. These findings suggest that the absence of local shocks may explain the stability of gender norms in similar countries.
This paper examines how different income distribution policies may influence the future distribution of intelligence quotient (IQ) in a population. Using a multi-period individual-based simulation model, and assuming the inheritance of IQ from one generation to the next, we report simulation results under five different income distribution policies: egalitarian, quasi-egalitarian, liberal egalitarian, liberal quasi-egalitarian, and libertarian. Our model has two main assumptions on the fertility rate in line with the findings from the relevant literature: (i) there is a negative correlation between intelligence and fertility (i.e., dysgenic fertility) and (ii) there is a U-shaped correlation between income and fertility. Our results indicate that overall intelligence in a population always tends to decline in the presence of dysgenic fertility. The quasi-egalitarian income distribution policy performs the best in decelerating that decline in IQ levels, even when intelligence has a significantly higher influence on the fertility rate than income. On the other hand, if dysgenic fertility can be suppressed to a sufficient extent, then the libertarian income distribution policy is revealed to be the best policy to improve the population’s overall intelligence.
Do individuals choose their reference groups, i.e. their Joneses, or are they culturally transmitted across generations and through the social environment? We provide evidence that feeds the theoretical debate about the origins of reference groups. Our findings for Uruguay suggest that reference groups are largely transmitted across generations and are also shaped by the social environment where individuals live. Our results are robust to several checks and to endogeneity issues. Our analysis of mechanisms shows that transmission is strongest when parents are homogeneous and when the gender of the parent and the offspring is the same.
This paper establishes the theoretical result that the sample mth Gini index is an unbiased estimator of the population mth Gini index, introduced by Gavilan-Ruiz et al. (2024), for gamma-distributed populations, extending and generalizing the key finding of Baydil et al. (2025). An illustrative Monte Carlo simulation study is performed to numerically check that our implementation recovers the theoretical unbiasednes of the sample mth Gini index estimator in finite samples.
Detailed distributional estimates at finer geographical levels remain scarce, despite their critical relevance for household well being and policy intervention. This paper leverages Italian income tax records dating back to 1976 focusing on top income concentration and inequality across the country’s regions, macro-areas, and the recently introduced classification of the National Strategy for Inner Areas (SNAI). Our analysis reveals a persistent rise in income concentration over the past few decades, particularly among the top earners, while also highlighting nuanced regional and sub-regional dynamics. Notably, city size plays a crucial role, with larger cities experiencing a more pronounced level of income concentration compared to smaller ones. Southern regions exhibit lower income concentration levels among the top income groups, emphasizing the need for disaggregated analyses to capture these complexities accurately. (Stone Center on Socio-Economic Inequality Working Paper)
This study explores the effect of capital share on income inequality over the past four decades across 56 countries. We provide the first cross-country framework that measures this link with consistency between theory and data, and captures its heterogeneity across countries and over time. Capital shares are calculated from national accounts, and top income shares are taken from the World Inequality Database, constructed using the Distributional National Accounts methodology to ensure consistent definitions. Building on a simple accounting identity, we estimate the transmission coefficient—the effect of the capital share on inequality—allowing it to vary across countries and time. A one percentage point (pp) rise in the capital share increases the income share of the top 5
This paper offers a novel and robust approach to measure the distributional impact of crises at a sub-national level, in settings where conventional economic data are delayed, incomplete, or unavailable. Using the COVID-19 pandemic as an illustrative case study, we first employ satellite-derived nighttime light data to construct a monthly indicator of spatial inequality for all African countries from 2015 to 2021. This measure captures disparities within sub-national areas by examining the distribution of light per person across uniform one-kilometre cells. We show that national measures of inequality mask substantial heterogeneity at sub-national level. We then apply a Causal-ARIMA (Causal-AutoRegressive Integrated Moving Average) approach, which generates counterfactual forecasts based solely on pre-pandemic dynamics, to identify the distributional effects of the COVID-19 shock. The results indicate that wealthier and more industrialized areas implementing more stringent containment measures experienced more pronounced reductions in inequality. The study underscores the potential of our empirical strategy for tracking inequality dynamics during times of crisis, offering a valuable tool for policymakers when canonical data sources are inaccessible.
