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The distributional implications of asymmetric income dynamics

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The distributional implications of asymmetric income dynamics. / Angelopoulos, Konstantinos; Lazarakis, Spyridon; Malley, James.
In: European Economic Review, Vol. 128, 103502, 01.09.2020.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Angelopoulos, K, Lazarakis, S & Malley, J 2020, 'The distributional implications of asymmetric income dynamics', European Economic Review, vol. 128, 103502. https://doi.org/10.1016/j.euroecorev.2020.103502

APA

Angelopoulos, K., Lazarakis, S., & Malley, J. (2020). The distributional implications of asymmetric income dynamics. European Economic Review, 128, Article 103502. https://doi.org/10.1016/j.euroecorev.2020.103502

Vancouver

Angelopoulos K, Lazarakis S, Malley J. The distributional implications of asymmetric income dynamics. European Economic Review. 2020 Sept 1;128:103502. Epub 2020 Jun 24. doi: 10.1016/j.euroecorev.2020.103502

Author

Angelopoulos, Konstantinos ; Lazarakis, Spyridon ; Malley, James. / The distributional implications of asymmetric income dynamics. In: European Economic Review. 2020 ; Vol. 128.

Bibtex

@article{8984fc6db6414932ba090ce668420ad6,
title = "The distributional implications of asymmetric income dynamics",
abstract = "Income dynamics differ between groups of households defined by whether the head has university education or not and have changed asymmetrically in Great Britain since 2008. Using a heterogenous agent incomplete markets model, we examine the quantitative implications of these differences for wealth inequality and for the distribution of conditional welfare losses. Within-group wealth inequality is higher for the non-university group and has increased since 2008 for both groups, while between-group inequality has also increased. Welfare losses are significantly higher for the non-university educated since 2008, and are driven by both a greater fall in mean income and a larger rise in income risk. Non-university educated households, which had initial wealth below the median and net labour income in the lower quintiles, suffered bigger losses. Social insurance policies beyond those currently in place can mitigate such welfare losses via tax and benefit redistributive mechanisms. For the broad majority of households, social insurance is valued more when it insures against the big adverse income shocks.",
keywords = "incomplete markets, labour income processes, conditional welfare, insurance policy",
author = "Konstantinos Angelopoulos and Spyridon Lazarakis and James Malley",
year = "2020",
month = sep,
day = "1",
doi = "10.1016/j.euroecorev.2020.103502",
language = "English",
volume = "128",
journal = "European Economic Review",
issn = "0014-2921",
publisher = "Elsevier",

}

RIS

TY - JOUR

T1 - The distributional implications of asymmetric income dynamics

AU - Angelopoulos, Konstantinos

AU - Lazarakis, Spyridon

AU - Malley, James

PY - 2020/9/1

Y1 - 2020/9/1

N2 - Income dynamics differ between groups of households defined by whether the head has university education or not and have changed asymmetrically in Great Britain since 2008. Using a heterogenous agent incomplete markets model, we examine the quantitative implications of these differences for wealth inequality and for the distribution of conditional welfare losses. Within-group wealth inequality is higher for the non-university group and has increased since 2008 for both groups, while between-group inequality has also increased. Welfare losses are significantly higher for the non-university educated since 2008, and are driven by both a greater fall in mean income and a larger rise in income risk. Non-university educated households, which had initial wealth below the median and net labour income in the lower quintiles, suffered bigger losses. Social insurance policies beyond those currently in place can mitigate such welfare losses via tax and benefit redistributive mechanisms. For the broad majority of households, social insurance is valued more when it insures against the big adverse income shocks.

AB - Income dynamics differ between groups of households defined by whether the head has university education or not and have changed asymmetrically in Great Britain since 2008. Using a heterogenous agent incomplete markets model, we examine the quantitative implications of these differences for wealth inequality and for the distribution of conditional welfare losses. Within-group wealth inequality is higher for the non-university group and has increased since 2008 for both groups, while between-group inequality has also increased. Welfare losses are significantly higher for the non-university educated since 2008, and are driven by both a greater fall in mean income and a larger rise in income risk. Non-university educated households, which had initial wealth below the median and net labour income in the lower quintiles, suffered bigger losses. Social insurance policies beyond those currently in place can mitigate such welfare losses via tax and benefit redistributive mechanisms. For the broad majority of households, social insurance is valued more when it insures against the big adverse income shocks.

KW - incomplete markets

KW - labour income processes

KW - conditional welfare

KW - insurance policy

U2 - 10.1016/j.euroecorev.2020.103502

DO - 10.1016/j.euroecorev.2020.103502

M3 - Journal article

VL - 128

JO - European Economic Review

JF - European Economic Review

SN - 0014-2921

M1 - 103502

ER -