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Oxford Economic Papers Advance Access published online on May 30, 2006
Oxford Economic Papers, doi:10.1093/oep/gpl014
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© Oxford University Press 2006; All rights reserved

Original Papers

Trends in income inequality, pro-poor income growth, and income mobility

Stephen P. Jenkins 1 and Philippe Van Kerm 2 *

1 Institute for Social and Economic Research, University of Essex
2 CEPS/INSTEAD, B.P. 48, L-4501 Differdange G.-D. Luxembourg

* To whom correspondence should be addressed.
Philippe Van Kerm, E-mail: philippe.vankerm{at}ceps.lu


  Abstract

We provide an analytical framework within which changes in income inequality over time are related to the pattern of income growth across the income range and the reshuffling of individuals in the income pecking order. We use the framework first to explain how it was possible both for the poor to have fared badly relatively to the rich in the USA during the 1980s (when income inequality grew substantially), and also for income growth to have been pro-poor. Second, we contrast the US experience with that of Western Germany, where there was a much smaller rise in inequality. This is accounted for by income growth that was more pro-poor than in the USA.

JEL classifications: D31; I32.


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