SECULAR EQUALIZATION AND CYCLICAL BEHAVIOR OF INCOME DISTRIBUTION,
Abstract
A purpose of the investigation is to suggest an aggregate model that incorporates short-run factors that displace the distribution of income from the long run equilibrium trend. Annual personal income data for the Netherlands are employed in verifying the structure, estimating the parameters and testing the hypotheses implicit in the proposed model. The following conclusions emerge from the study: (1) income inequality has not only decreased in the Netherlands during the last fifty years, but the secular decline substantially exceeds earlier estimates; (2) this secular equalization of incomes appears to stem from the increased labor share of income and its more equal distribution; (3) the secular trend toward income equalization is greater when differences in income associated with age and sex are eliminated from recent time series; (4) cyclical changes in income inequality are important and can be statistically 'explained' in terms of aggregate disequilibrium in factor markets that induce change in price and employment levels; (5) the distributional effect of change in the price level has diminished and that of change in labor productivity has increased in the period since the Second World War. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Dec 01, 1966
- Accession Number
- AD0646596
Entities
People
- T. Paul Schultz
Organizations
- RAND Corporation