This paper presents evidence on household savings in urban regions of the Chinese provinces Sichu... more This paper presents evidence on household savings in urban regions of the Chinese provinces Sichuan and Liaoning, based on data from the State Statistical Bureau's Urban Household Survey for the late 1980s. In this period the Chinese economy was subject to extensive reforms that resulted in rapid economic growth followed by extremely high inflation. The high inflation rates gave the households strong motives to switch from financial savings to purchase of consumer durables, which also appear to be consistent with the ...
The standard approach in the applied literature on income distribution is to estimate income ineq... more The standard approach in the applied literature on income distribution is to estimate income inequality under the assumption of full interpersonal comparability of income. In order to be meaningful, this approach requires identical prices and qualities of goods as well as uniform norms and consumption habits across regions. To account for relevant non-income heterogeneity between individuals, we propose to partition
This paper is concerned with the problem of ranking Lorenz curves in situations where the Lorenz ... more This paper is concerned with the problem of ranking Lorenz curves in situations where the Lorenz curves intersect and no unambiguous ranking can be attained without introducing weaker ranking criteria than first-degree Lorenz dominance. To deal with such situations, Aaberge (Soc Choice Welf 33:235–259, 2009) introduced two alternative sequences of nested dominance criteria for Lorenz curves, which proved to characterize
This paper proposes a two-step aggregation method for measuring long-term income inequality and i... more This paper proposes a two-step aggregation method for measuring long-term income inequality and income mobility, where mobility is defined as an equalizer of long-term income. The first step consists of aggregating the income stream of each individual into a measure of permanent income, which accounts for the costs associated with income fluctuations and allows for credit market imperfections. The second
The paper presents a model of household labour supply that allows for simultaneous decisions of h... more The paper presents a model of household labour supply that allows for simultaneous decisions of household members, complex and non-convex choice sets induced by tax and benefit rules, and quantity constraints on hours choice. The model is estimated using the 1993 Bank of Italy’s Survey of Household Income and Wealth, and used to simulate three hypothetical tax reforms: namely, a
This paper uses the Peruvian Living Standard Survey (PLSS) data to analyze: (a) inequality in the... more This paper uses the Peruvian Living Standard Survey (PLSS) data to analyze: (a) inequality in the distribution of income; (b) labor market participation of men and women and the variations in hours of work; and (c) the relationship between variations in labor supply and income inequality. It uses a decomposing method to analyze income inequality and utilizes a structural neo-classical model to analyze household production, consumption, time allocation and welfare. The purpose is to study the effect on production, consumption, and time allocation of changes in education and wage rates. Most of the available information on economic inequality in developing countries refers to the distribution of income among earners. Although this information constitutes an important element for understanding the labor market and the related distribution of income, it is less helpful in the analysis of inequality as a welfare issue. A more relevant indicator of welfare is per capita household income o...
As an alternative to the conventional methods for measuring chronic poverty, this paper proposes ... more As an alternative to the conventional methods for measuring chronic poverty, this paper proposes to use an interpersonal comparable measure of permanent income as a basis for defining and measuring chronic poverty. This approach accounts for the fact that individuals may undertake inter-period income transfers if it is to their advantage. Moreover, it allows for individual-specific interest rates on borrowing and saving as well as for the presence of liquidity constraints. Due to its general nature the proposed method proves useful for evaluating the theoretical basis of the standard methods for measuring chronic poverty.
An analysis of poverty based on a country-specific income poverty line suffers from disregarding ... more An analysis of poverty based on a country-specific income poverty line suffers from disregarding regional differences in prices and needs within a country and may, therefore, produce results that give a misleading picture of the extent of poverty as well as the geographic and demographic composition of the poor. To account for differences in prices and needs, this paper introduces
This paper is concerned with the problem of ranking Lorenz curves in situations where the Lorenz ... more This paper is concerned with the problem of ranking Lorenz curves in situations where the Lorenz curves intersect and no unambiguous ranking can be attained without introducing weaker ranking criteria than first-degree Lorenz dominance. To deal with such situations, Aaberge (Soc Choice Welf 33:235–259, 2009) introduced two alternative sequences of nested dominance criteria for Lorenz curves, which proved to characterize
In this paper we estimate a model of household labor supply using an econometric approch that all... more In this paper we estimate a model of household labor supply using an econometric approch that allows simultaneous decisions of household members, complex and non-convex choice sets induced by tax and benefit rules, and quantity constraints on hours choice. The model is estimated using the 1993
... Our point of departure, on which the policy evaluation methodology is based, is a particular ... more ... Our point of departure, on which the policy evaluation methodology is based, is a particular framework of modeling labor supply behavior developed in ... A labor supply model can be used to identify the gains and losses from tax reforms by applying different Hicks-compensating ...
In this paper, we introduce and apply a general framework for evaluating long-term income distrib... more In this paper, we introduce and apply a general framework for evaluating long-term income distributions according to the Equality of Opportunity principle. Our framework allows for both an exante and an ex-post approach to EOp. Our ex-post approach relies on a permanent income measure defined as the minimum annual expenditure an individual would need in order to be as well off as he could be by undertaking inter-period income transfers. There is long-term ex-post inequality of opportunity if individuals who exert the same effort have different permanent incomes. In comparison, the ex-ante approach focuses on the expected permanent income for individuals with identical circumstances. Hence, the ex-ante approach pays attention to inequalities in expected permanent income between different types of individuals. To demonstrate the empirical relevance of a long-run perspective on EOp, we exploit a unique panel data from Norway on individuals' incomes over their working lifespan.
Despite a broad consensus on the need to take into account the value of public services in distri... more Despite a broad consensus on the need to take into account the value of public services in distributional analysis, there is little reliable evidence on how the inclusion of such non-cash income actually affects poverty and inequality estimates. In particular, the equivalence scales applied to cash income are not necessarily appropriate when including non-cash income, because the receipt of public services is likely to be associated with particular needs. In this paper, we propose a theorybased framework designed to provide a coherent evaluation of the distributional impact of local public services. The valuation of public services, identification of target groups, allocation of expenditures to target groups, and adjustment for differences in needs are derived from a model of local government spending behaviour. Using Norwegian data from municipal accounts and administrative registers we find that the inclusion of non-cash income reduces income inequality by about 15 percent and poverty rates by almost one-third. However, adjusting for differences in needs for public services across population subgroups offsets about half the inequality reduction and some of the poverty decrease.
This paper discusses the question of whether or not the high incidence of poverty among immigrant... more This paper discusses the question of whether or not the high incidence of poverty among immigrants in Norway persists even after immigrants have been in the country for a long period, i.e. after they have had the opportunity to integrate and adapt their skills to the expectations in their new home. While similar to traditional studies of wage assimilation, a
This paper employs a microeconometric framework to examine the labor supply responses and the wel... more This paper employs a microeconometric framework to examine the labor supply responses and the welfare effects from replacing current tax systems in Italy, Norway and Sweden by a flat tax on total income. The flat tax rates are determined so that the tax revenues are equal to the revenues as of 1992. The flat tax rates vary from 23 per cent in Italy, 25 per cent in Norway, to 29 per cent in Sweden. In all three countries the labor supply responses decline sharply with pre-reform disposable income. The results show that the efficiency costs of the current tax systems relative to a flat tax may be rather high in Norway and much lower, but positive, in Italy and Sweden. In all three countries "rich" households -defined by their pre-tax-reform income -tend to benefit more than "poor" households. In Italy and Sweden a majority will lose from a shift to a flat tax, while in Norway a majority is predicted to win.
Testing conditional symmetry against various alternative diagonals-parameter symmetry models ofte... more Testing conditional symmetry against various alternative diagonals-parameter symmetry models often provides a point of departure in studies of square contingency tables with ordered categories. Typically, chi-square or likelihood-ratio tests are used for such purposes. Since these tests depend on the validity of asymptotic approximation, they may be inappropriate in small-sample situations where exact tests are required. In this paper, we apply the theory of UMP unbiased tests to develop a class of exact tests for conditional symmetry in small samples. Oesophageal cancer and longitudinal income data are used to illustrate the approach.
... A married couple's version of the model is estimated on Italian microdata. The empir... more ... A married couple's version of the model is estimated on Italian microdata. The empirical results show that male labour supply is rather inelastic while labour supply among females, especially participation, is considerably more elastic. ...
This paper presents evidence on household savings in urban regions of the Chinese provinces Sichu... more This paper presents evidence on household savings in urban regions of the Chinese provinces Sichuan and Liaoning, based on data from the State Statistical Bureau's Urban Household Survey for the late 1980s. In this period the Chinese economy was subject to extensive reforms that resulted in rapid economic growth followed by extremely high inflation. The high inflation rates gave the households strong motives to switch from financial savings to purchase of consumer durables, which also appear to be consistent with the ...
The standard approach in the applied literature on income distribution is to estimate income ineq... more The standard approach in the applied literature on income distribution is to estimate income inequality under the assumption of full interpersonal comparability of income. In order to be meaningful, this approach requires identical prices and qualities of goods as well as uniform norms and consumption habits across regions. To account for relevant non-income heterogeneity between individuals, we propose to partition
This paper is concerned with the problem of ranking Lorenz curves in situations where the Lorenz ... more This paper is concerned with the problem of ranking Lorenz curves in situations where the Lorenz curves intersect and no unambiguous ranking can be attained without introducing weaker ranking criteria than first-degree Lorenz dominance. To deal with such situations, Aaberge (Soc Choice Welf 33:235–259, 2009) introduced two alternative sequences of nested dominance criteria for Lorenz curves, which proved to characterize
This paper proposes a two-step aggregation method for measuring long-term income inequality and i... more This paper proposes a two-step aggregation method for measuring long-term income inequality and income mobility, where mobility is defined as an equalizer of long-term income. The first step consists of aggregating the income stream of each individual into a measure of permanent income, which accounts for the costs associated with income fluctuations and allows for credit market imperfections. The second
The paper presents a model of household labour supply that allows for simultaneous decisions of h... more The paper presents a model of household labour supply that allows for simultaneous decisions of household members, complex and non-convex choice sets induced by tax and benefit rules, and quantity constraints on hours choice. The model is estimated using the 1993 Bank of Italy’s Survey of Household Income and Wealth, and used to simulate three hypothetical tax reforms: namely, a
This paper uses the Peruvian Living Standard Survey (PLSS) data to analyze: (a) inequality in the... more This paper uses the Peruvian Living Standard Survey (PLSS) data to analyze: (a) inequality in the distribution of income; (b) labor market participation of men and women and the variations in hours of work; and (c) the relationship between variations in labor supply and income inequality. It uses a decomposing method to analyze income inequality and utilizes a structural neo-classical model to analyze household production, consumption, time allocation and welfare. The purpose is to study the effect on production, consumption, and time allocation of changes in education and wage rates. Most of the available information on economic inequality in developing countries refers to the distribution of income among earners. Although this information constitutes an important element for understanding the labor market and the related distribution of income, it is less helpful in the analysis of inequality as a welfare issue. A more relevant indicator of welfare is per capita household income o...
As an alternative to the conventional methods for measuring chronic poverty, this paper proposes ... more As an alternative to the conventional methods for measuring chronic poverty, this paper proposes to use an interpersonal comparable measure of permanent income as a basis for defining and measuring chronic poverty. This approach accounts for the fact that individuals may undertake inter-period income transfers if it is to their advantage. Moreover, it allows for individual-specific interest rates on borrowing and saving as well as for the presence of liquidity constraints. Due to its general nature the proposed method proves useful for evaluating the theoretical basis of the standard methods for measuring chronic poverty.
An analysis of poverty based on a country-specific income poverty line suffers from disregarding ... more An analysis of poverty based on a country-specific income poverty line suffers from disregarding regional differences in prices and needs within a country and may, therefore, produce results that give a misleading picture of the extent of poverty as well as the geographic and demographic composition of the poor. To account for differences in prices and needs, this paper introduces
This paper is concerned with the problem of ranking Lorenz curves in situations where the Lorenz ... more This paper is concerned with the problem of ranking Lorenz curves in situations where the Lorenz curves intersect and no unambiguous ranking can be attained without introducing weaker ranking criteria than first-degree Lorenz dominance. To deal with such situations, Aaberge (Soc Choice Welf 33:235–259, 2009) introduced two alternative sequences of nested dominance criteria for Lorenz curves, which proved to characterize
In this paper we estimate a model of household labor supply using an econometric approch that all... more In this paper we estimate a model of household labor supply using an econometric approch that allows simultaneous decisions of household members, complex and non-convex choice sets induced by tax and benefit rules, and quantity constraints on hours choice. The model is estimated using the 1993
... Our point of departure, on which the policy evaluation methodology is based, is a particular ... more ... Our point of departure, on which the policy evaluation methodology is based, is a particular framework of modeling labor supply behavior developed in ... A labor supply model can be used to identify the gains and losses from tax reforms by applying different Hicks-compensating ...
In this paper, we introduce and apply a general framework for evaluating long-term income distrib... more In this paper, we introduce and apply a general framework for evaluating long-term income distributions according to the Equality of Opportunity principle. Our framework allows for both an exante and an ex-post approach to EOp. Our ex-post approach relies on a permanent income measure defined as the minimum annual expenditure an individual would need in order to be as well off as he could be by undertaking inter-period income transfers. There is long-term ex-post inequality of opportunity if individuals who exert the same effort have different permanent incomes. In comparison, the ex-ante approach focuses on the expected permanent income for individuals with identical circumstances. Hence, the ex-ante approach pays attention to inequalities in expected permanent income between different types of individuals. To demonstrate the empirical relevance of a long-run perspective on EOp, we exploit a unique panel data from Norway on individuals' incomes over their working lifespan.
Despite a broad consensus on the need to take into account the value of public services in distri... more Despite a broad consensus on the need to take into account the value of public services in distributional analysis, there is little reliable evidence on how the inclusion of such non-cash income actually affects poverty and inequality estimates. In particular, the equivalence scales applied to cash income are not necessarily appropriate when including non-cash income, because the receipt of public services is likely to be associated with particular needs. In this paper, we propose a theorybased framework designed to provide a coherent evaluation of the distributional impact of local public services. The valuation of public services, identification of target groups, allocation of expenditures to target groups, and adjustment for differences in needs are derived from a model of local government spending behaviour. Using Norwegian data from municipal accounts and administrative registers we find that the inclusion of non-cash income reduces income inequality by about 15 percent and poverty rates by almost one-third. However, adjusting for differences in needs for public services across population subgroups offsets about half the inequality reduction and some of the poverty decrease.
This paper discusses the question of whether or not the high incidence of poverty among immigrant... more This paper discusses the question of whether or not the high incidence of poverty among immigrants in Norway persists even after immigrants have been in the country for a long period, i.e. after they have had the opportunity to integrate and adapt their skills to the expectations in their new home. While similar to traditional studies of wage assimilation, a
This paper employs a microeconometric framework to examine the labor supply responses and the wel... more This paper employs a microeconometric framework to examine the labor supply responses and the welfare effects from replacing current tax systems in Italy, Norway and Sweden by a flat tax on total income. The flat tax rates are determined so that the tax revenues are equal to the revenues as of 1992. The flat tax rates vary from 23 per cent in Italy, 25 per cent in Norway, to 29 per cent in Sweden. In all three countries the labor supply responses decline sharply with pre-reform disposable income. The results show that the efficiency costs of the current tax systems relative to a flat tax may be rather high in Norway and much lower, but positive, in Italy and Sweden. In all three countries "rich" households -defined by their pre-tax-reform income -tend to benefit more than "poor" households. In Italy and Sweden a majority will lose from a shift to a flat tax, while in Norway a majority is predicted to win.
Testing conditional symmetry against various alternative diagonals-parameter symmetry models ofte... more Testing conditional symmetry against various alternative diagonals-parameter symmetry models often provides a point of departure in studies of square contingency tables with ordered categories. Typically, chi-square or likelihood-ratio tests are used for such purposes. Since these tests depend on the validity of asymptotic approximation, they may be inappropriate in small-sample situations where exact tests are required. In this paper, we apply the theory of UMP unbiased tests to develop a class of exact tests for conditional symmetry in small samples. Oesophageal cancer and longitudinal income data are used to illustrate the approach.
... A married couple's version of the model is estimated on Italian microdata. The empir... more ... A married couple's version of the model is estimated on Italian microdata. The empirical results show that male labour supply is rather inelastic while labour supply among females, especially participation, is considerably more elastic. ...
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Papers by Rolf Aaberge