Discussion Paper Series in Economics, Department of Economics, Norwegian School of Economics (NHH)
Older or Wealthier? The Impact of Age Adjustment on Cross-Sectional Inequality Measures.
() and Magne Mogstad
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, a concern is that one confuses older with
wealthier. We propose a new method to adjust for age effects in
cross-sections, which eliminates wealth inequality due to age, yet
preserves inequality arising from other factors. Using a new cross-country
comparable database, we examine the impact of age adjustments on wealth
inequality across countries and over time. We find that the most widely
used method yield a substantially different picture of age adjusted wealth
inequality than our method.
Keywords: Wealth inequality; Life cycle; Age adjustments; Gini coefficient.; (follow links to similar papers)
JEL-Codes: D31; D63; D91; E21; (follow links to similar papers)
55 pages, March 9, 2010
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