This paper considers a wide class of inequality indices and identifies those which are additively decomposable. The sub-class of mean independent, additively decomposable measures turns out to be a single parameter family which includes the squared coefficient of variation and the two Theil's entropy formulas.

The class of additively decomposable inequality measures

For helpful comments on earlier drafts, we thank, without implicating, Moses Abramovitz, Yves Balcer, John Bishop, Alan Blinder, Richard Burkhauser, Michael Darby, Irwin Garfinkel, Alan Gustman, Daniel Hamermesh, Martin Holmer, George Jakubson, Robert Lampman, Paul Menchik, Robert Moffitt, Michael Murray, Joseph Quinn, Timothy Smeeding, Eugene Smolensky, Barbara Wolfe and two anonymous referees.

How Income Transfer Programs Affect Work, Savings, and the Income Distribution: A Critical Review

Post war Britain has experienced a number of dramatic demographic and social changes that have undoubtedly influenced the distribution of income. There has been a rise in the number of pensioners, whose incomes are relatively low, a considerable increase in the number of young and old households living on their own, and a remarkable expansion in the proportion of working wives. The potential importance of these structural changes suggests that their impact on the income distribution needs to be examined systematically before any attempt can be made to interpret the observed trend in overall income inequality >-adequately. The method usually adopted for this purpose attempts to create a comparable time series of distributions based on the structural characteristics pertaining in one particular year. For example, if we wished to investigate the effect of shifts in the age structure of the population, this approach would disaggregate the distribution in one year, tl, and estimate what the distribution would have been like if the age structure had been the same as that observed in some other year to, on the assumption that other distributional characteristics (such as ageincome differentials and inequality within age groups) remain invariant to this demographic change. The comparison between the actual distribution at t1 and the constructed distribution at t1 with to's age structure is taken to indicate the impact of changes in the age structure over the period concerned. This comparison can be presented in terms of quantile shares, summary measures of inequality or the entire Lorenz curves. This approach, known as 'shift-share analysis' or 'standardising' the inequality series (see Semple (I975), Love and Wolfson (I976), Dinwiddy and Reed (I977), Royal Commission (I977), Rowley and Henderson (I978), MacLeod and Horner (I980)), is perfectly adequate for simple and straightforward structural changes. When several changes are occurring simultaneously, however, it becomes difficult to identify the contribution of the individual factors, and to assess their relative importance to the overall trend in inequality. Furthermore, the combined impact of several structural influences will not in general sum up to the inequality change requiring explanation.' The purpose of this paper is to propose an alternative method of analysing

https://www.jstor.org/stable/info/2232673

A Decomposition Analysis of the Trend in UK Income Inequality

The Gini coefficient has long been thought unsuitable for inequality decomposition analysis because of a troublesome and little-understood residual term that occurs when subgroup income ranges overlap after the between-groups and within-groups contributions to inequality have been separated out. In this paper, graphical analysis is used to provide a solid understanding of the residual term as a subarea of the Lorenz diagram. Implications for inequality decomposition analysis are considered. Copyright 1993 by Royal Economic Society.

https://www.jstor.org/stable/pdfplus/2234247.pdf

Inequality decomposition analysis and the Gini coefficient revisited

Poverty Reduction and Growth is about the existence of these vicious circles in Latin America and the Caribbean about the ways and means to convert them into virtuous circles in which poverty reduction and high growth reinforce each other. This publication is organized as follows: Chapter 1: From vicious to virtuous circle; Chapter 2: Dimensions of well-being, channels to growth; Chapter 3: How did we get here? Chapter 4: The relative roles of growth and inequality for poverty reduction; Chapter 5: Pro-poor growth in Latin America; Chapter 6: Does poverty matter for growth? Chapter 7: Subnational dimensions of growth and poverty; Chapter 8: Microdeterminants of incomes: labor markets, poverty, and traps?; and Chapter 9: Breaking the cycle of underinvestment in human capital in Latin America.

Paglin Morton

Papers

The measurement and trend of inequality: a basic revision