Economics Bear BLOG, Delong at UCB

Ten Pieces Worth Reading, Mostly Economics: March 6, 2010

1) Andrew Leigh: Permanent Income Inequality: Australia, Britain, Germany, and the United States Compared:

This paper uses panel data from four developed nations to estimate permanent income inequality, measured by averaging equalized household income across multiple years. In general, I find that permanent income inequality has followed similar trends to annual income inequality, rising particularly sharply in the United States over the 1980s and 1990s. Comparing levels of permanent income inequality across countries, the ranking of triennial pre-government inequality is Germany, the US, Britain, Australia. However, a more progressive systems of taxes and transfers in Britain and Germany changes these rankings substantially. In terms of triennial post-government inequality, the ranking is the US, Australia, Germany, Britain. Additionally, I calculate mobility rates across countries, and find some evidence that mobility rates rose during the 1990s in both Britain and the US. Ranking the four countries in terms of mobility, and taking the effects of government policies into account, I find that in the most recent year, the most mobile of the four countries is Australia, while the least mobile is Germany...