Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/iuj/wpaper/ems_2024_06.html
   My bibliography  Save this paper

The Roles of Location and Education in Income Inequality: An Analytical Framework

Author

Listed:
  • Takahiro Akita

    (IUJ Research Institute, International University of Japan)

Abstract
This study develops a two-stage hierarchical inequality decomposition method as an analytical framework for the examination of the roles of rural/urban location and education in income inequality. It compares this method with a non-hierarchical inequality decomposition method. In the two-stage hierarchical inequality decomposition method, a hierarchical structure of a country is considered, where individuals are classified first into the rural and urban sectors and then into several education groups. Using the Theil indices, overall income inequality is decomposed hierarchically into the following three components: the between-sector, within-sector between-group, and within-sector within-group inequality components. The between-sector component evaluates income disparity between the rural and urban sectors, while the within-sector between-group component evaluates income inequality among the education groups, but adjusted for rural-urban differences in the structure of educational attainment. The within-sector within-group component assesses inequality within the education groups. In the non-hierarchical inequality decomposition method, overall income inequality is decomposed simultaneously but non-hierarchically based on individual attributes. In the context of location and education, overall income inequality, as measured by the Theil indices, is decomposed non-hierarchically into the following four components: the between-sector, between-group, location-education interaction, and within-sector within-group inequality components. The location-education interaction component assesses the extent of rural-urban differences in the income disparity among the education groups. It can take a negative value. Based on nation-wide household surveys, this study also presents the results of hierarchical and non-hierarchical inequality decomposition analyses for Indonesia and the Philippines.

Suggested Citation

  • Takahiro Akita, 2024. "The Roles of Location and Education in Income Inequality: An Analytical Framework," Working Papers EMS_2024_06, Research Institute, International University of Japan.
    • Handle: RePEc:iuj:wpaper:ems_2024_06
    as

    Download full text from publisher

    File URL: https://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2024_06.pdf
    File Function: First version, 2024
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
    2. repec:bla:revinw:v:38:y:1992:i:2:p:225-36 is not listed on IDEAS
    3. Aekapol Chongvilaivan & Jungsuk Kim, 2016. "Individual Income Inequality and Its Drivers in Indonesia: A Theil Decomposition Reassessment," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 126(1), pages 79-98, March.
    4. Heather Dickey, 2001. "Regional Earnings Inequality in Great Britain: A Decomposition Analysis," Regional Studies, Taylor & Francis Journals, vol. 35(7), pages 605-612.
    5. David Gray & Jeffrey A. Mills & Sourushe Zandvakili, 2003. "Statistical analysis of inequality with decompositions: the Canadian experience," Empirical Economics, Springer, vol. 28(2), pages 291-302, April.
    6. Chris Elbers & Peter Lanjouw & Johan Mistiaen & Berk Özler, 2008. "Reinterpreting between-group inequality," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 6(3), pages 231-245, September.
    7. Takahiro AKITA & Rizal Affandi LUKMAN & Yukino YAMADA, 1999. "Inequality In The Distribution Of Household Expenditures In Indonesia: A Theil Decomposition Analysis," The Developing Economies, Institute of Developing Economies, vol. 37(2), pages 197-221, June.
    8. V. V. Bhanoji Rao & D. S. Banerjee & Pundarik Mukhopadhaya, 2003. "Earnings Inequality In Singapore," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 8(2), pages 210-228.
    9. Fields, Gary S, 1979. "Dec.mposing LDC Inequality," Oxford Economic Papers, Oxford University Press, vol. 31(3), pages 437-459, November.
    10. Mookherjee, Dilip & Shorrocks, Anthony F, 1982. "A Decomposition Analysis of the Trend in UK Income Inequality," Economic Journal, Royal Economic Society, vol. 92(368), pages 886-902, December.
    11. Kam Ki Tang & Dennis Petrie, 2009. "Non-Hierarchical Bivariate Decomposition of Theil Indexes," Economics Bulletin, AccessEcon, vol. 29(2), pages 918-927.
    12. Padmaja Mishra & Ashok Parikh, 1992. "Household Consumer Expenditure Inequalities In India: A Decomposition Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 38(2), pages 225-236, June.
    13. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-920, July.
    14. Pundarik Mukhopadhaya, 2003. "Trends in Total and Subgroup Income Inequality in the Singaporean Workforce," Asian Economic Journal, East Asian Economic Association, vol. 17(3), pages 243-264, September.
    15. Anthony Shorrocks & Guanghua Wan, 2005. "Spatial decomposition of inequality," Journal of Economic Geography, Oxford University Press, vol. 5(1), pages 59-81, January.
    16. Frank A. Cowell, 1984. "The Structure Of American Income Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 30(3), pages 351-375, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Takahiro Akita & Sachiko Miyata, 2020. "Urban and Rural Dimensions of the Role of Education in Inequality: A Comparative Analysis between Indonesia, Myanmar, and the Philippines," Working Papers EMS_2020_04, Research Institute, International University of Japan.
    2. Takahiro Akita & Sachiko Miyata, 2023. "Education and Expenditure Inequality in Indonesia and the Philippines: A Comparative Analysis in an Urban and Rural Dual Framework," Working Papers EMS_2023_03, Research Institute, International University of Japan.
    3. Takahiro Akita & Sachiko Miyata, 2008. "Urbanization, educational expansion, and expenditure inequality in Indonesia in 1996, 1999, and 2002," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 13(2), pages 147-167.
    4. Takahiro Akita & Sachiko Miyata, 2018. "Spatial Inequalities in Indonesia, 1996–2010: A Hierarchical Decomposition Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 138(3), pages 829-852, August.
    5. Takahiro Akita, 2017. "Educational Expansion and the Role of Education in Expenditure Inequality in Indonesia Since the 1997 Financial Crisis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 130(3), pages 1165-1186, February.
    6. Takahiro Akita & Sachiko Miyata, 2013. "The roles of location and education in the distribution of economic well-being in Indonesia: hierarchical and non-hierarchical inequality decomposition analyses," Letters in Spatial and Resource Sciences, Springer, vol. 6(3), pages 137-150, November.
    7. Dorji Lethro & Takahiro Akita, 2019. "The roles of education in expenditure inequality in Bhutan: an analysis in an urban–rural context," Asia-Pacific Journal of Regional Science, Springer, vol. 3(2), pages 465-485, June.
    8. Takahiro Akita & Raquel Celeste & Sachiko Miyata, 2023. "Why Has Inequality in the Philippines Declined? A Two-stage Hierarchical Inequality Decomposition Analysis by Location and Education," Working Papers EMS_2023_07, Research Institute, International University of Japan.
    9. Takahiro Akita, 2002. "Regional Income Inequality In Indonesia And The Initial Impact Of The Economic Crisis," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 38(2), pages 201-222.
    10. James E. Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster-Greer-Thorbecke (FGT) Poverty Measures: Twenty-Five Years Later," Working Papers 2010-14, The George Washington University, Institute for International Economic Policy.
    11. Takahiro Akita, 2000. "Decomposing Regional Income Inequality Using Two-Stage Nested Theil Decomposition Method," Working Papers EMS_2000_02, Research Institute, International University of Japan.
    12. Wu, Dengsheng & Yuan, Lili & Li, Ruoyun & Li, Jianping, 2018. "Decomposing inequality in research funding by university-institute sub-group: A three-stage nested Theil index," Journal of Informetrics, Elsevier, vol. 12(4), pages 1312-1326.
    13. Aekapol Chongvilaivan & Jungsuk Kim, 2016. "Individual Income Inequality and Its Drivers in Indonesia: A Theil Decomposition Reassessment," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 126(1), pages 79-98, March.
    14. Takahiro Akita & Armida S. Alisjahbana, 2001. "The Economic Crisis and Regional Income Inequality in Indonesia," Working Papers EMS_2001_06, Research Institute, International University of Japan.
    15. Weizsäcker, Robert K. von, 1995. "Does an Aging Population Increase Inequality?," Discussion Papers 535, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
    16. von Weizsacker, Robert K., 1996. "Distributive implications of an aging society," European Economic Review, Elsevier, vol. 40(3-5), pages 729-746, April.
    17. Takahiro Akita, 2001. "Regional Income Inequality in China: A Two-Stage Nested Inequality Decomposition Analysis," Working Papers EMS_2001_05, Research Institute, International University of Japan.
    18. Takahiro Akita, 2002. "Income Inequality in Indonesia," Working Papers EMS_2002_02, Research Institute, International University of Japan.
    19. Elbers, Chris & Lanjouw, Peter & Mistiaen, Johan A. & Ozler, Berk, 2005. "Re-interpreting sub-group inequality decompositions," Policy Research Working Paper Series 3687, The World Bank.
    20. Takahiro Akita & Rizal Affandi Lukman, 1999. "Spatial Patterns of Expenditure Inequalities in Indonesia: 1987, 1990 and 1993," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 35(2), pages 67-90.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iuj:wpaper:ems_2024_06. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kazumi Imai, Office of Academic Affairs (email available below). General contact details of provider: https://edirc.repec.org/data/gsiujjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.