Full Citation

Title: Inequality When Effort Matters

Citation Type: Working Paper

Publication Year: 2015

ISBN:

ISSN:

DOI:

NSFID:

PMCID:

PMID:

Abstract: It is sometimes argued that poorer people choose to work less, implying less welfare inequality than suggested by observed incomes. Social policies have also acknowledged that efforts differ, and that people respond to incentives. Prevailing measures of inequality (in outcomes or opportunities) do not, however, measure incomes consistently with personal choices of effort. The direction of bias is unclear given the heterogeneity in efforts and preferences. Data on the labor supplies of single American adults suggest that adjusting for effort imposing common preferences attenuates inequality, although the effect is small. Allowing for preference heterogeneity consistently with behavior suggests higher inequality.

Url: http://www.ecineq.org/milano/WP/ECINEQ2015-367.pdf

Url: http://www.nber.org/papers/w21394.pdf

User Submitted?: No

Authors: Ravallion, Martin

Series Title: ECINEQ WP

Publication Number: 2015 - 367

Institution: National Bureau of Economic Research

Pages:

Publisher Location: Massachusetts

Data Collections: IPUMS CPS

Topics: Other, Poverty and Welfare

Countries: United States