Full Citation

Title: Inequality and Poverty when Effort Matters

Citation Type: Miscellaneous

Publication Year: 2016

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Abstract: It is often claimed that standard measures overestimate the extent ofinequality and poverty on the grounds that poorer people tend to work less. The paper points to a number of reasons to question this claim. To illustrate, the laborsupplies of single American adults are shown to have a positive income gradient, but with considerable heterogeneity, generating (horizontal) inequality. Using equivalent incomes to adjust for effort reveals either higher inequality or a small increase in inequality, depending on the measurement assumptions made. With even a modest allowance for leisure as a basic need, the effort-adjusted welfarepoverty rate rises

Url: http://pubdocs.worldbank.org/en/793321477430217510/Inequality-when-effort-matters.pdf

User Submitted?: No

Authors: Ravallion, Martin

Publisher: Department of Economics, Georgetown University

Data Collections: IPUMS CPS

Topics: Labor Force and Occupational Structure, Poverty and Welfare

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