Static and Dynamic Indices of Income Inequality

The present paper proposes a combined measure of static and dynamic inequality to be used in cross-country and historical comparisons. The measure proposed generalises any static index of inequality whether based upon some social welfare function or not. The measure is applied, in an illustrative fashion, to data from Great Britain and the United States. The results shed light on potential tradeoffs by indicating the upper limits on welfare gains to society attainable through redistribution. They suggest that this tradeoff is likely to be quite small since differences in social stratijcation and economic performance as large as those between the United States and Great Britain in the sixties led to quite similar social welfare gains through dynamic income prospect equalisation

Demographic economics · Development economics · Econometrics · Economic inequality · Economics · Income inequality metrics · Index (typography · Inequality · Labour economics · Market economy · Measure (data warehouse · Microeconomics · Political science · Politics · Public economics · Public good · Redistribution (election · Redistribution of income and wealth · Social Welfare · Social welfare function · Welfare · Computer Science · Economic theories and models · Fiscal Policy and Economic Growth · Income, Poverty, and Inequality · Mathematics