Research Paper CIQLE Working Papers 2009-03
Conceptualizing and measuring structural inequality
01 Jun 2009
In this paper we conceptualize inequality in a population as having two basic types—individual inequality and structural inequality—with the former generated by individual variations whereas the latter responding to the social structure in a society represented by social groups or how vertical differentiation relates to horizontal differentiation according to Blau’s theory. We propose some structural inequality measures, including a disaggregative and an aggregative version of the structural Gini as well as a set of structural Theil measures and a standard error estimator for the structural Theil as particularly useful implementations. The proposed measures are examined in one simulation and three empirical applications. The simulation study analyzed a range of two-class situations of varying degrees of inequality. Three empirical data analyses using the 1991 British Household Panel Survey, the 2005 Panel Study of Income Dynamics from the US, and the 2000 Luxembourg Income Study from six EU countries are conducted. The applications taken together suggest some useful properties of the new measures that the conventional Gini and Theil measures including Theil decompositions do not possess. Used together with the conventional measures, the structural inequality measures provide a complementary picture of the form of inequality in a society; standing alone, these measures give a single index of the degree of stratification in the form of structural inequality ignored by conventional measures.
From BHPS 2009 conf.paper. This series isn't on Econpapers or RePEc. JCI 14/10/09; working paper