Labour supply, welfare rankings and the measurement of inequality

Apps, P; Savage, E

Labour supply, welfare rankings and the measurement of inequality

Apps, P Savage, E

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Publication Type:: Journal Article
Citation:: Journal of Public Economics, 1989, 39 (3), pp. 335 - 364
Issue Date:: 1989-01-01

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Field	Value	Language
dc.contributor.author	Apps, P	en_US
dc.contributor.author	Savage, E https://orcid.org/0000-0002-2690-3975	en_US
dc.date.issued	1989-01-01	en_US
dc.identifier.citation	Journal of Public Economics, 1989, 39 (3), pp. 335 - 364	en_US
dc.identifier.issn	0047-2727	en_US
dc.identifier.uri	http://hdl.handle.net/10453/26134
dc.description.abstract	This paper presents an analysis of inequality using utility-based measures of welfare derived from different approaches to modelling household labour supplies. The almost Ideal Demand System specification of preferences is selected for the estimation of a neoclassical household model and of individual decision models which incorporate different assumptions concerning the intra-household distribution of income using the Rosen (1976) tax perception methodology. The study also explores the implications of a model which does not constrain time at home to leisure. Welfare rankings and inequality measures defined on equivalent income are compared for each type of model. The analysis uses Australian unit record data on 3,352 households drawn from the Australian Bureau of Statistics 1981-82 Income and Housing Sample Survey file. The results indicate the sensitivity of welfare orderings and inequality measures to the choice of decision model and to the specification of lump-sum transfers between family members. A comparative study of equivalent incomes and selected money income variables also illustrates the limitations of observed household and individual incomes as welfare indicators for the analysis of inequality and for policy design. © 1989.	en_US
dc.relation.ispartof	Journal of Public Economics	en_US
dc.relation.isbasedon	10.1016/0047-2727(89)90033-9	en_US
dc.subject.classification	Economics	en_US
dc.title	Labour supply, welfare rankings and the measurement of inequality	en_US
dc.type	Journal Article
utslib.citation.volume	3	en_US
utslib.citation.volume	39	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	1401 Economic Theory	en_US
utslib.for	1403 Econometrics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
utslib.copyright.status	closed_access
pubs.issue	3	en_US
pubs.publication-status	Published	en_US
pubs.volume	39	en_US

Abstract:

This paper presents an analysis of inequality using utility-based measures of welfare derived from different approaches to modelling household labour supplies. The almost Ideal Demand System specification of preferences is selected for the estimation of a neoclassical household model and of individual decision models which incorporate different assumptions concerning the intra-household distribution of income using the Rosen (1976) tax perception methodology. The study also explores the implications of a model which does not constrain time at home to leisure. Welfare rankings and inequality measures defined on equivalent income are compared for each type of model. The analysis uses Australian unit record data on 3,352 households drawn from the Australian Bureau of Statistics 1981-82 Income and Housing Sample Survey file. The results indicate the sensitivity of welfare orderings and inequality measures to the choice of decision model and to the specification of lump-sum transfers between family members. A comparative study of equivalent incomes and selected money income variables also illustrates the limitations of observed household and individual incomes as welfare indicators for the analysis of inequality and for policy design. © 1989.

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http://hdl.handle.net/10453/26134