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Economic Growth and Income Inequality

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Economic Growth and Income Inequality

For such a distribution of mature expenditure units by secular levels of income per capita, w3 should measure shares of some fixed ordinal groups-percentiles, deci.es, quintiles, etc. In the underlying array the units sho:ld be classifiea oy average income levels for a sufficiently long span so that they form income-status groups-say a generation or about 25 years. Within such a period, even when classified by secular income levels, units may shift from one ordinal group to another. It would, therefore, be nec.-.ssary and useful to study separately the rela-tive share of units that: . hroughout the generation period of reference, were continuously with-r a specific ordinal group, and the share of the units that moved into tha,t specific group; and this shoulcl be done for the shares of ccresidents" and "migrants" within all ordinal groups.

 Without such a long period of reference and the resulting separation between ccresident" and "migrant" units at different relative income levels, the very distinction between "low" and 'chigh" income classes loses its meaning, partic./;larly in a study of long-term changes in shares and in inequalities in '"l.e distribution. To say, for example, that the《lower" income classes gained or lost during the last twenty years in that their share of totaliicome increased or decreased has meaning only if the units have been classified as members of the {{lower" classes throughout those 20 years-and for those who have moved into or out of those classes recently such a statement has no significapce.



 

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