Beyond Oaxaca-Blinder: Accounting for differences in household income distributions

Abstract : This paper develops a method to decompose differences across distributions of household income, based on counterfactual distributions that 'lie between' the actually observed distributions. Our approach decomposes differences between any two income distributions (or functionals such as inequality or poverty measures) into shares due to price effects; occupational structure effects; and endowment effects. Comparing the household income distributions of the USA and Brazil in 1999, we find that most of Brazil's excess inequality (of 13 Gini points) is accounted for by underlying inequalities in the distributions of education and of non-labor income, notably pensions (between four and six Gini points each). Steeper returns to education in Brazil also make an important contribution (of two to five points). Differences in occupational structure and in racial and demographic composition are much less important.
Document type :
Journal articles
Complete list of metadatas

https://hal-pjse.archives-ouvertes.fr/halshs-00754283
Contributor : Caroline Bauer <>
Submitted on : Tuesday, November 20, 2012 - 8:52:52 AM
Last modification on : Thursday, June 13, 2019 - 4:50:02 PM

Links full text

Identifiers

Collections

Citation

François Bourguignon, Ferreira Francisco H. G., Philippe G. Leite. Beyond Oaxaca-Blinder: Accounting for differences in household income distributions. Journal of Economic Inequality, Springer Verlag, 2008, 6 (2), pp.117-148. ⟨10.1007/s10888-007-9063-y⟩. ⟨halshs-00754283⟩

Share

Metrics

Record views

236