Multidimensional Inequality Across Three Developed Countries

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Rohde, Nicholas
Guest, Ross
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2018
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Abstract

This paper produces comparable estimates of multidimensional inequality for the U.S., Germany, and Australia. Two alternative approaches with differing interpretations are employed. The first method projects all facets of welfare onto a single variable which is then analyzed using standard univariate techniques. The second approach establishes equivalent-income distributions that would lead to an equalization of welfare, such that the difference between this counterfactual and the true income distribution can be measured. This difference is then interpreted as the degree of income redistribution required to offset welfare inequality. Using data on permanent incomes, health scores, years of education, and leisure times, we observe much higher levels of inequality in the U.S. than in Germany or Australia. Our results are highly statistically significant and hold over a large variety of weighting specifications.

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Review of Income and Wealth

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This publication has been entered into Griffith Research Online as an Advanced Online Version.

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Economic theory

Applied economics

Applied economics not elsewhere classified

Econometrics

Banking, finance and investment

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