Comparing inequality and mobility in linear models

Baochun Peng

Research output: Journal article publicationJournal articleAcademic researchpeer-review

1 Citation (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 languageEnglish
Pages (from-to)155-157
Number of pages3
JournalEconomics Letters
Volume168
DOIs
Publication statusPublished - 1 Jul 2018

Keywords

  • Equality of opportunity
  • Income
  • Inequality
  • Mobility
  • Wealth

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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