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A NEW FRAMEWORK FOR THE ANALYSIS OF INEQUALITY

Published online by Cambridge University Press:  01 September 2008

Flavio Cunha  and
James Heckman
Flavio Cunha
Affiliation:
University of Pennsylvania
James Heckman*
Affiliation:
University of Chicago, American Bar Foundation and University College Dublin
*
Address correspondence to: James Heckman, Department of Economics, University of Chicago, 1126 E. 59th Street, Chicago, IL 60637, USA; e-mail: jjh@uchicago.edu.
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Abstract

This paper presents a new framework for analyzing inequality that moves beyond the anonymity postulate. We estimate the determinants of sectoral choice and the joint distributions of outcomes across sectors. We determine which components of realized earnings variability are due to uncertainty and which components are due to components of human diversity that are forcastable by agents. Using our tools, we can determine how policies shift persons across sectors and outcome distributions across sectors.

Keywords

InequalityAnonymity PostulateUncertaintyPolicy Evaluation

Information

Type
Articles
Information
Macroeconomic Dynamics , Volume 12 , Supplement S2: Inequality , September 2008 , pp. 315 - 354
Copyright
Copyright © Cambridge University Press 2008

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