Comparing inequality and mobility in linear models

Baochun Peng

doi:10.1016/j.econlet.2018.04.014

Comparing inequality and mobility in linear models

Baochun Peng

Research output: Journal article publication › Journal article › Academic research › peer-review

2 Citations (Scopus)

Abstract

This note shows that income risk and capital risk affect mobility and inequality asymmetrically in the linear model analysed by Zhu (2013). Inequality responds to changes in both income risk and capital risk, while mobility responds to changes in capital risk and may not respond to changes in income risk. Consequently, income tax reduces wealth inequality without affecting wealth mobility, while tax on capital returns reduces wealth inequality and increases wealth mobility.

Original language	English
Pages (from-to)	155-157
Number of pages	3
Journal	Economics Letters
Volume	168
DOIs	https://doi.org/10.1016/j.econlet.2018.04.014
Publication status	Published - 1 Jul 2018

Keywords

Equality of opportunity
Income
Inequality
Mobility
Wealth

ASJC Scopus subject areas

Finance
Economics and Econometrics

More information

10.1016/j.econlet.2018.04.014

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title = "Comparing inequality and mobility in linear models",

abstract = "This note shows that income risk and capital risk affect mobility and inequality asymmetrically in the linear model analysed by Zhu (2013). Inequality responds to changes in both income risk and capital risk, while mobility responds to changes in capital risk and may not respond to changes in income risk. Consequently, income tax reduces wealth inequality without affecting wealth mobility, while tax on capital returns reduces wealth inequality and increases wealth mobility.",

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AB - This note shows that income risk and capital risk affect mobility and inequality asymmetrically in the linear model analysed by Zhu (2013). Inequality responds to changes in both income risk and capital risk, while mobility responds to changes in capital risk and may not respond to changes in income risk. Consequently, income tax reduces wealth inequality without affecting wealth mobility, while tax on capital returns reduces wealth inequality and increases wealth mobility.

KW - Equality of opportunity

KW - Income

KW - Inequality

KW - Mobility

KW - Wealth

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JO - Economics Letters

JF - Economics Letters

ER -

Comparing inequality and mobility in linear models

Abstract

Keywords

ASJC Scopus subject areas

More information

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