Cahier 2017-15

Title:The Impact of Talents and Preferences on Income Inequality
Abstract:Different trends in the distribution of income across countries and in the same country over time are typically observed. The general question we are interested in is to know where these inequalities come from and what explains their differences. By restricting our attention to an artisan economy with no taxation and where individuals have identical preferences but different productivities, we study the impact on the inequality of labour income of particular changes in the way productivities are allocated. Then, assuming that the distribution of productivities is fixed, we look for the modifications of the preferences that lead to a more even distribution of income. Finally, we examine the question of how simultaneous changes in preferences and in the distribution of productivities interact in shaping the distribution of labour income.
Keyword(s):Income, Inequality, Productivities, Preferences, Lorenz Dominance.
Auteur(s) :Udo EBERT, Patrick MOYES
JEL Class.:D31, D63

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