Saunders, Peter O'Connor, Inge Smeeding, Timothy Michael
Year of Publication:
LIS Working Paper Series No. 122
Luxembourg Income Study (LIS), Luxembourg
Cross-national comparisons of earnings inequality can be misleading when unemployment rates and rate of female labor force participation differ across countries. This is because such comparisons implicitly place zero values on underutilized labor market activity and domestic labor. This paper approaches this problem by using an earnings capacity technique developed by Irwin Garfinkel and Robert Haveman, an extension of Gary Becker's full-income concept.