Layers of Inequality: Unequal Opportunities and Skin Color in Mexico

We document the contribution of skin color toward quantifying inequality of opportunity over a proxy indicator of wealth. Our Ferreira–Gignoux estimates of inequality of opportunity as a share of total wealth inequality show that once parental wealth is included as a circumstance variable, the share of inequality of opportunity rises above 40%, overall and for every age cohort. By contrast, the contribution of skin tone to total inequality of opportunity remains minor throughout.

How Does Mortality Contribute to Lifetime Pension Inequality? Evidence From Five Decades of Swedish Taxation Data

As with many social transfer schemes, pension systems around the world are often progressive: individuals with lower incomes receive a higher percentage of their income as a subsequent pension. On the other hand, it is well known that those with lower earnings have higher mortality and thus accumulate fewer years of pension income. These opposite factors, therefore, both contribute to the progressiveness of a given pension system. Thus far, empirical research efforts to disentangle the effects of mortality inequality on lifetime pension income have been scarce. To close this gap, we use Swedish taxation data linked with death registers from 1970 to 2018 to study how education and pre-retirement earnings relate to lifetime pension income from age 60 onwards, as well as how inequalities in mortality between groups contribute to overall inequalities in lifetime pension income. The results show that both a progressive replacement structure and mortality differentials contribute to the overall distribution of life-course pension payments. A substantial proportion of the total inequality in lifetime pensions can be attributed to the fact that socially advantaged groups live longer, and this is particularly true for men. Mortality differences can explain up to 28% of the lifetime pension benefits between socioeconomic groups. We conclude that inequalities in mortality play an important part in determining the overall degree of between-group income transfers in a pension system.

Trends in the Social Class Inequalities in Disability and Self-Rated Health: Repeated Cross-Sectional Surveys from Finland and Sweden 2001–2018

Objectives: To assess time trends in the social class inequalities and in total inequality in disability and self-rated health (SRH) in two oldest old populations.Methods: The data came from the Finnish Vitality 90+ Study (2001, 2003, 2007, 2010, 2014 and 2018; n = 5,440) and from the Swedish Panel Study of Living Conditions of the Oldest Old (2002, 2004, 2011 and 2014; n = 1,645). Inequalities in mobility and activities of daily living (ADL) disability and SRH were examined cross-sectionally and over time using relative and absolute measures.Results: Lower social classes had greater mobility and ADL disability and worse SRH than higher social classes and the inequalities tended to increase over time. Findings were remarkably similar in both studies and with absolute and relative measures. Total inequality, referring to the variance in health outcome in the total population, remained stable or decreased.Conclusion: The study suggests that the earlier findings of improved mobility and ADL are largely driven by the positive development in higher social classes while findings of decline in SRH are related to the worsening of SRH in lower social classes

DOES GOVERNMENT SPENDING ON EDUCATION AFFECT PROVINCIAL INCOME INEQUALITY IN VIETNAM?

This study is conducted to examine the effect on income inequality of government spending on education across 63 provinces in Vietnam. The generalized method of moments (GMM) regression technique is used to address potential endogeneity in the model caused by income inequality and inequality in government spending on education. Income inequality is proxied by both the Gini coefficient and the Theil index. Inequality in government spending on education in Vietnam is estimated using a novel entropic approach, which decomposes the inequality into two components: “within-province” inequality and “between-province” inequality. Data for the period from 2010 to 2016 are used. Our empirical findings are summarized as follows. First, “within-province” inequality accounts for a substantial portion of inequality in government spending on education. This means that although the Vietnamese national government has done well in terms of allocating spending on education across 63 provinces, inequality in education spending appears across districts within provinces. Second, both total inequality of government spending on education and its two components are positively associated with income inequality across provinces. As such, reducing differences in government spending on education across provinces and across districts within provinces is an effective mechanism for reducing income inequality across provinces and across districts within provinces in Vietnam.

Inequality of opportunity in Brazil: decomposition of the sources of injustice between 2001 and 2014

PurposeThis article aims to measure inequality of income and opportunities at the national and state levels in Brazil, highlighting their acceptable and unacceptable components.Design/methodology/approachTo this end, a lower-bound estimate of income inequality (MLD) and inequality of opportunity (IOp) was developed using data from the National Household Sample Survey between 2001 and 2014.FindingsIt shows that the disparity of income measured by the MLD decreased 26.7 percent, while IOp measured by the IOp decreased 25.6 percent during that period. The decline in total inequality can be attributed to a 48.5 percent decrease of its unfair component and 51.5 percent decrease of its fair component. The average income of the most disadvantaged group (non-white women working in the informal sector) is shown to be only 29.5 percent of the income of the most advantaged group (formally employed white men). The groups at the greatest disadvantage were most benefited by the increase in income.Originality/valueBeyond comparisons among countries, analysis at the subnational level make it possible to identify how the process that generates inequality acts in each state, revealing patterns undetected in the aggregate analysis. Its decomposition generates two products that are useful to policy-makers. The first is a base estimate of the degree of IOp present in society, which may be expressed as an indicator of the degree of IOp. The second examines the portion of total inequality attributable to IOp.

Source of Inequality in Consumption Expenditure in India: A Regression Based Inequality Decomposition Analysis

The present paper estimates the Regression based inequality decomposition for the years 2004-05 and 2011-12.The decomposition based regression analysis finds that household size, level of education, share of workers engaged in less productive jobs (such as, casual labour and agricultural worker), regular salary earning member of a household, higher level of land possessed by the households, and households having hired dwelling unit are responsible for the maximum share of inequality in the total inequality of the average monthly per capita expenditure (MPCE) and predicted MPCE in the both urban and rural areas.

Establishment heterogeneity, rent sharing and the rise of wage inequality in Germany

Purpose – The purpose of this paper is to examine the role wage dispersion across establishments has played in recent increases in total wage inequality in Germany and compares it to inequality changes at the individual level. It is queried whether the contribution of establishment heterogeneity to the rise of wage inequality stems from changes of institutional settings or from structures such as establishment size and the composition of the workforce. Design/methodology/approach – Applying regression-based decompositions of variance to German linked employer-employee panel data for the years 2000-2010 it is analysed to what extent changes associated to firm structures contribute to the rise of total wage inequality. Findings – Results show that the rise in wage inequality in Germany to a great extent is associated to rising wage variance across establishments, implying that establishment specific wage premiums have grown. By further decomposing across firm components of wage inequality, it is found that changes in across establishment wage inequality related to collective bargaining, worker co-determination and internal labour markets together account for about 3 per cent of the rise in total inequality. Inequality changes related to establishments’ skill and occupational composition account for about 11 per cent and establishment size alone accounts for about 18 per cent of the rise in total inequality. Originality/value – The main contribution is to quantify the relation of specific establishment characteristics to the rise in total wage inequality over time. Conclusions are drawn about the importance of mechanisms of rent sharing at the firm level in comparison to the determination of wages by individual qualification.

Continuing caste inequalities in rural Uttar Pradesh

Purpose – A continuous mixed opinion on the relevance of caste-based reservations and caste as a factor of socioeconomic disparity in the recent period demands update of evidence on socioeconomic inequalities among caste groups for effective policy making. The purpose of this paper is to investigate whether the caste inequalities in terms of socioeconomic opportunities and poverty are still persisting in rural Uttar Pradesh based on village census surveys? Design/methodology/approach – This study used data primarily collected from four village census surveys under the project rural transformation in Uttar Pradesh, 2013. Bivariate analyses, human opportunity index (HOI), multidimensional poverty index (MPI) and inequality decomposition analyses used as methods of analyses. Findings – The authors findings suggest that in spite of more than six decades of welfare policies and major political mobilization movements among lower castes in the state, the huge inequalities in terms of critical socioeconomic indicators such as landholding, higher education and wealth distribution and multi-dimensional poverty across the castes are still persisting in the state. Decomposition results suggest that between group inequalities contribute more to the total inequality in landholding whereas within group inequalities contribute maximum to total inequality in education and wealth status of different castes in rural Uttar Pradesh. However, within inequalities much less in general castes compared to SCs/OBCs. Originality/value – Based on its latest empirical evidence, this study strengthens the argument that caste still matters in socioeconomic achievements of the population in India even after decades of planning and financing of social welfare schemes to uplift the lower castes in India. Thus, provides critical inputs to current debates on the relevance of caste as a determinant of socioeconomic status in India.

Income inequality in the EU: how do member states contribute?

Purpose – The purpose of this paper is to analyse the structure of overall inequality in the EU-15 by investigating the extent to which total inequality is attributed to inequality between or within the individual countries. Also, the paper examines whether the contribution of between-country and within-country components changed in the period between 1996 to 2008, before the outbreak of the economic crisis. Design/methodology/approach – The paper applies a decomposition analysis by population subgroup utilizing micro-data from the ECHP and EU-SILC surveys. A number of inequality indices are employed to capture the different aspects of inequality and test the robustness of the results. Findings – The analysis shows that the between-countries differences account only for a small part of overall inequality in the EU-15. Furthermore, the contribution of the between county component to total inequality has shrunk dramatically during the examined period. The overall EU inequality has been affected disproportionally by income disparities at the various parts of the income distribution in different countries. Practical implications – Policies aiming to reduce inequality within each country would be far more effective in reducing overall inequality in the EU than policies targeting to reduce only disparities between member states. Originality/value – The findings question the effectiveness of EU policy priorities to decrease inequality that have mainly focused on reducing cross-country and/or regions differences regarding certain macroeconomic indicators such as per-capita income (or GDP). The evidence suggests that the social protection system provides a useful tool in explaining the differences in inequality between countries and their contribution to overall EU inequality.