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Lecture 14: Inequality and Inclusion - Coggle Diagram
Lecture 14:
Inequality and Inclusion
Inequality can be in many different things
it can also be unequaly regionally distributed
income
weath
etc
Inequality doesnt change with proportional changes - if everyones income goes up inequality stays the same; same with population
the measure of inequality should satisfy the Pigou=Dalton condition - transfer from rich to poor reduces and vice versa
aditively decomposable = you should be able to
GINI is the most used variable and satisfies these conditinos
easy to calculate
comparable across countries
comparable across time
THE PROBLEM
Its based on income distribution and not wealth(weath data is hard to get hands on)
The index doesnt feature all the richness of the data of the curve itself
it doesnt give us an insight into the dirvers of inequality
Theil T Inxed
the overall coefficient is not userful for interpretation
BUT if we decompose the meausre we can measure withing group inequlaity and between group inequality
1 more item...
Theil L
2 more items...
sensitive to the differences at the top of the distibution (the most rich)
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Inequality and poverty are not related - inequality is going up while poverty is going down
today what explains over a half of the global inequality wheras in the past it was only 10%
WHAT ARE THE CUASE OF INCOME INEQUALITU
We can see the distribution but to identify the causes its extremely difficutl
possible cauases
labour income
wage rates
particiaption
Non-labour (cpaital income
transfers
social policy
family structure
sometimes the rich tend to marry rich and poor poor and in others not (then inequality goes down because there is basically a transfer)
you have to go thorugh the nodes agian
Namibia
Has a really high inequality in GINI terms
majority of population is black, minority is white (oldsettleres); = dutch english and german speaking whites -> the big picture is racial inequality
of the 90% who are literate 20% european, 81% are african
income for whites two times higher
lets calculate GINI within the groups
the GINI for all the groups is very high
you look at what drives income differences by sector
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Jordan
2 mil working age women = around half less than high school and around one 6th university
in each education bracket only avery small fraction is working BUT if you are university educated 60% is working
even withing those who are actuvely searching for jobs - 40%c cant find it
women in jordan are exlided from the labour market on an unprecedented level but the exclusion rate depends on the education status
Oaxaca Blined Decomposition
explaining witing group income gap by female, expirience, indigenour, rural etc
