Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/150728
Authors: 
Almas, Ingvild
Mogstady, Magne
Year of Publication: 
2009
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research 181
Abstract: 
Differences in individual wealth holdings are widely viewed as a driving force of economic inequality. However, as this finding relies on cross-section data, we may confuse older with wealthier. We propose a new method to adjust for age effects in cross-sections, which eliminates transitory wealth inequality due to age, yet preserves inequality arising from other factors. This new method is superior to existing methods, like the much used Paglin-Gini, which is shown to have several problems. A new cross-country comparable database reveals that the choice of method is empirically important: Existing methods yield erroneous wealth inequality rankings of countries.
Subjects: 
Wealth inequality
Life cycle
Age adjustments
Gini coefficient
JEL: 
D31
D63
D91
E21
Document Type: 
Working Paper

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