Beyond Oaxaca-Blinder: accounting for differences in household income distributions across countries

Arbeitspapier

This paper develops a micro-econometric method to account for differences across distributions of household income. Going beyond the determination of earnings in labor markets, we also estimate statistical models for occupational choice and for the conditional distributions of education, fertility and non-labor incomes. We import combinations of estimated parameters from these models to simulate counterfactual income distributions. This allows us to decompose differences between functionals of two income distributions (such as inequality or poverty measures) into shares due to differences in the structure of labor market returns (price effects); differences in the occupational structure; and differences in the underlying distribution of assets (endowment effects). We apply the method to the differences between the Brazilian income distribution and those of the United States and Mexico, and find that most of Brazil's excess income inequality is due to underlying inequalities in the distribution of two key endowments: access to education and to sources of non-labor income, mainly pensions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Texto para discussão ; No. 452

Classification and Topics

• Classification: Wirtschaft ; Statistical Simulation Methods: General ; Personal Income, Wealth, and Their Distributions ; General Welfare; Well-Being ; Fertility; Family Planning; Child Care; Children; Youth ; Time Allocation and Labor Supply
• Subject: Einkommensverteilung ; Haushaltseinkommen ; Brasilien ; Mexiko ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bourguignon, François ; Ferreira, Francisco H. G. ; Leite, Phillippe G.
• Event: Veröffentlichung
• (who): Pontifícia Universidade Católica do Rio de Janeiro (PUC-Rio), Departamento de Economia
• (where): Rio de Janeiro
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/175939
• Last update: 10.03.2025, 11:42 AM CET