Generalised percentile ratios as robust measures of labour earnings inequality

We propose a class of generalised percentile ratios as an alternative to the P<SUB align="right">90</SUB> / P<SUB align="right">10</SUB> ratio for measuring labour earnings inequality. We show that they are more robust to sampling the variation and rounding error prevalent in interview-based surveys, as demonstrated through a Monte Carlo simulation and with Current Population Survey labour earnings data from 1987 to 2005. We find a smoother upward trend in the P<SUB align="right">90</SUB> / P<SUB align="right">10</SUB> ratio over this period than what is shown with conventionally measured P<SUB align="right">90</SUB> / P<SUB align="right">10</SUB> ratios.percentile ratios; robustness; labour earnings inequality.