"Redistribution Through Taxation: An International Comparison"

Income tax progressivity is studied using Generalized Entropy measures of inequality. Luxembourg Income Study data sets for ten countries are used for international comparative purposes and analysis. Progressivity indices are generated using the Generalized Entropy family as well as Atkinson measures. This is to test the robustness of our observation of tax progressivity in each country. We further our understanding by looking at pre-tax and post-tax measures of inequality based on gross household income and disposable household income, respectively. The decomposition property is shown to be desirable in order to enhance our view of true inequality and the implication of taxes. Thus decomposition based on quintile, family sizes, and number of earners is conducted. This has allowed an interpretation of results that could be attributed to any of the above characteristics and components which are free of such group characteristics.

"The Distributional Implications of the Tax Changes in the 1980s"

This paper studies changes in the United States as a consequence of the Economic Recovery Act of 1981 (ERITA), the Tax Equality and Fiscal Responsibility Act of 1982 (TEFRA), and the Tax Reform Act of 1986 (TRA). The effects of ERITA, TEFRA, and TRA are demonstrated via measures of pre-tax and post-tax inequality based on gross household income and disposable household income. Thus, the distribution of income, and also the tax payments, consist of components that are attributed to tax changes and components that are driven by the pre-tax income. Typically, most analysts view the distribution of pre-tax and post-tax income based on GINI coefficients. However, this analysis employs the decomposable Generalized Entropy measure, which enables the distribution of the "between group" and "within group" (weighted average) effects of taxation. Moreover, this approach allows for a more accurate assessment of tax progressivity in the long run. This process provides a better framework to evaluate the policy implications of future tax changes. The results illustrate that long-run income tax progressivity has been declining over time. Concurrently, we witness a relative rise in pre-tax and post-tax income inequality over the latter portion of the accounting interval. It is further evidenced that a number of exemptions and the type of tax table used create more equalization within each group, but cross- group equalization is minimal. When decomposed by quintile, the data reveal more cross-group equalization than within-group equalization.

"Generalized Entropy Measures of Long-Run Inequality and Stability Among Male Headed Households"

Short and long-run inequalities and income stability among households with male heads are measured and analyzed using the Panel Study of Income Dynamics for 1969-81. The results suggest short-run inequalities are increasing over the period with fluctuations. These fluctuations contain transitory components which can be eliminated by smoothing of the data. Long-run measures are less subject to fluctuations and, therefore, provide a better measure of inequality. They show a decrease in inequality in the early periods but increases after the mid-1970's. Several aggregator functions are used to compute "permanent income" variables for the long-run measures of inequality and stability. The measures are decomposed to reflect differences in age, education, and race. They are decomposed also into groups which are free of such group characteristics. Education has the most important influence on inequality. Stability profiles indicate, furthermore, most of the reduction in inequality in the early periods among households with male heads has been within particular groups. Reductions across groups are minimal.

International Comparison of Household Inequalities: Based on Micro Data with Decompositions

A family of generalized entropy measures are employed and decomposed by household head's age, gender, education, ethnicity, and family size to investigate inequality within 13 countries for comparative analysis

Statistical Inference via Bootstrapping for Measures of Inequality

In this paper we consider the use of bootstrap methods to compute interval estimates and perform hypothesis tests for decomposable measures of economic inequality. The bootstrap potentially represents a significant gain over available asymptotic intervals because it provides an easily implemented solution to the Behrens-Fisher problem. Two applications of this approach, using the PSID (for the study of taxation) and the NLSY (for the study of youth inequality), to the Gini coefficient and Theil's entropy measures of inequality, are provided. The results suggest that (i) statistical inference is essential even when large samples are available, and (ii) the bootstrap appears to perform well in this setting.

Generalized Entropy Measures of Long-Run Inequality and Stability Among Male Headed Households

Short and long-run inequalities and income stability among households with male heads are measured and analyzed using the Panel Study of Income Dynamics for 1969-81. The results suggest short-run inequalities are increasing over the period with fluctuations. These fluctuations contain transitory components which can be eliminated by smoothing of the data. Long-run measures are less subject to fluctuations and, therefore, provide a better measure of inequality. They show a decrease in inequality in the early periods but increases after the mid-1970's. Several aggregator functions are used to compute "permanent income" variables for the long-run measures of inequality and stability. The measures are decomposed to reflect differences in age, education, and race. They are decomposed also into groups which are free of such group characteristics. Education has the most important influence on inequality. Stability profiles indicate, furthermore, most of the reduction in inequality in the early periods among households with male heads has been within particular groups. Reductions across groups are minimal

International Comparison of Household Inequalities: Based on Micro Data with Decompositions

This paper demonstrates the usefulness of the decomposability property of the Generalized Entropy (GE) family of measures in comparing inequality among countries. A family of Generalized Entropy measures are decomposed by family size and by the household head's age, gender, education, and ethnicity. This is done in order to learn about components which are due to demographic differences between households, and within group components which are free of such group characteristics. This will further our understanding of the impact of different social-economic structures upon the distribution of income. Looking at the overall inequality for comparative analysis without the decompositions can provide us with only a partial picture of the differences and thus is inadequate. Moreover, internal analysis is enhanced since the decompositions will locate the potential source of inequality for diagnostic policy purposes. Luxembourg Income Study data sets are chosen for their richness and comparability of micro data on variables and attributes such as income, age, education, family size, gender, and ethnicity

Redistribution Through Taxation: An International Comparison by

Income tax progressivity is studied using Generalized Entropy measures of inequality. Luxembourg Income Study data sets for ten countries are used for international comparative purposes and analysis. Progressivity indices are generated using the Generalized Entropy family as well as Atkinson measures. This is to test the robustness of our observation of tax progressivity in each country. We further our understanding by looking at pre-tax and post-tax measures of inequality based on gross household income and disposable household income, respectively. The decomposition property is shown to be desirable in order to enhance our view of true inequality and the implication of taxes. Thus decomposition based on quintile, family sizes, and number of earners is conducted. This has allowed an interpretation of results that could be attributed to any of the above characteristics and components which One of the basic consequences of income taxation is to modify the distribution of income. The relative economic standing of households will b