Marco Ranaldi
Paris School of Economics, Economics, Graduate Student
- Université Paris 1 - Panthéon-Sorbonne, Economics, Graduate Studentadd
- I am PhD candidate at the Paris School of Economics and Université Paris 1 Panthéon-Sorbonne.edit
- Bruno Amableedit
The present paper proposes a theoretical framework to examine the relationship between the functional and personal distribution of income. To this end, it introduces the concept of inequality in income composition. Inequality in income... more
The present paper proposes a theoretical framework to examine the relationship between the functional and personal distribution of income. To this end, it introduces the concept of inequality in income composition. Inequality in income composition is high when two di erent sources of income are separately earned by the top and the bottom of the income distribution. On the contrary, it is low when each individual has the same population share of the two sources. This article designs an indicator to measure income composition inequality, named income- factor concentration index. The sign of the indicator determines the condition
of transmission for the rising share of income from any source to increase overall income inequality. This framework is then applied to several European countries on basis of EU-SILC data.
of transmission for the rising share of income from any source to increase overall income inequality. This framework is then applied to several European countries on basis of EU-SILC data.
Research Interests:
In this article, we study the link between the functional and personal distribution of income, focusing on the case of Italy between 1989 and 2016. To this end, we rely on the novel concept of income composition inequality. Income... more
In this article, we study the link between the functional and personal distribution of income, focusing on the case of Italy between 1989 and 2016. To this end, we rely on the novel concept of income composition inequality. Income composition inequality focuses on how unequally the composition of income is distributed across the population. The higher the overall degree of income composition inequality is, the stronger the link between the functional and personal distribution of income. We show that the strength of this link decreased steadily in Italy over the period considered. This result is robust to the use of different definitions of capital and labor and different estimation techniques of the degree of income composition inequality. The implications of this result are twofold. First, fluctuations in the total factor shares of income are having an increasingly weaker impact on income inequality in Italy. Second, Italy is moving towards becoming a multiple sources of income society. Finally, we conceptualize a simple rule of thumb for policy makers seeking to reduce income inequality in the long run: This rule relates fluctuations in the total factor shares and the level of income composition inequality to the specific income source to be redistributed.