On the positive correlation between income inequality and unemployment

Detalhes bibliográficos
Autor(a) principal: Cysne, Rubens Penha
Data de Publicação: 2004
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Institucional do FGV (FGV Repositório Digital)
Texto Completo: http://hdl.handle.net/10438/388
Resumo: Several empirical studies in the literature have documented the existence of a positive correlation between income inequalitiy and unemployment. I provide a theoretical framework under which this correlation can be better understood. The analysis is based on a dynamic job search under uncertainty. I start by proving the uniqueness of a stationary distribution of wages in the economy. Drawing upon this distribution, I provide a general expression for the Gini coefficient of income inequality. The expression has the advantage of not requiring a particular specification of the distribution of wage offers. Next, I show how the Gini coefficient varies as a function of the parameters of the model, and how it can be expected to be positively correlated with the rate of unemployment. Two examples are offered. The first, of a technical nature, to show that the convergence of the measures implied by the underlying Markov process can fail in some cases. The second, to provide a quantitative assessment of the model and of the mechanism linking unemployment and inequality.
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spelling Cysne, Rubens PenhaEscolas::EPGEFGV2008-05-13T15:23:20Z2008-05-13T15:23:20Z2004-08-010104-8910http://hdl.handle.net/10438/388Several empirical studies in the literature have documented the existence of a positive correlation between income inequalitiy and unemployment. I provide a theoretical framework under which this correlation can be better understood. The analysis is based on a dynamic job search under uncertainty. I start by proving the uniqueness of a stationary distribution of wages in the economy. Drawing upon this distribution, I provide a general expression for the Gini coefficient of income inequality. The expression has the advantage of not requiring a particular specification of the distribution of wage offers. Next, I show how the Gini coefficient varies as a function of the parameters of the model, and how it can be expected to be positively correlated with the rate of unemployment. Two examples are offered. The first, of a technical nature, to show that the convergence of the measures implied by the underlying Markov process can fail in some cases. The second, to provide a quantitative assessment of the model and of the mechanism linking unemployment and inequality.engFundação Getulio Vargas. Escola de Pós-graduação em EconomiaEnsaios Econômicos;561On the positive correlation between income inequality and unemploymentinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleEconomiaEconomiaRenda - DistribuiçãoDesempregoreponame:Repositório Institucional do FGV (FGV Repositório Digital)instname:Fundação Getulio Vargas (FGV)instacron:FGVinfo:eu-repo/semantics/openAccessORIGINAL1692.pdfapplication/pdf232607https://repositorio.fgv.br/bitstreams/e5fa70d0-ee93-47a1-a9a6-89195deee209/download954b4170bcc7aa33b8d8eca2f4ea073eMD51TEXT1692.pdf.txt1692.pdf.txtExtracted texttext/plain30385https://repositorio.fgv.br/bitstreams/adbb91d5-8de9-4c9f-852e-044343d86a2a/download7c229d4f30605872f42eaf75999572b6MD56THUMBNAIL1692.pdf.jpg1692.pdf.jpgGenerated Thumbnailimage/jpeg3247https://repositorio.fgv.br/bitstreams/9e1e313d-fc89-41d9-9fce-22e2c8741180/downloadda3368f241405c4f18ca17dc0ce7cdf9MD5710438/3882023-11-09 16:07:10.325open.accessoai:repositorio.fgv.br:10438/388https://repositorio.fgv.brRepositório InstitucionalPRIhttp://bibliotecadigital.fgv.br/dspace-oai/requestopendoar:39742023-11-09T16:07:10Repositório Institucional do FGV (FGV Repositório Digital) - Fundação Getulio Vargas (FGV)false
dc.title.eng.fl_str_mv On the positive correlation between income inequality and unemployment
title On the positive correlation between income inequality and unemployment
spellingShingle On the positive correlation between income inequality and unemployment
Cysne, Rubens Penha
Economia
Economia
Renda - Distribuição
Desemprego
title_short On the positive correlation between income inequality and unemployment
title_full On the positive correlation between income inequality and unemployment
title_fullStr On the positive correlation between income inequality and unemployment
title_full_unstemmed On the positive correlation between income inequality and unemployment
title_sort On the positive correlation between income inequality and unemployment
author Cysne, Rubens Penha
author_facet Cysne, Rubens Penha
author_role author
dc.contributor.unidadefgv.por.fl_str_mv Escolas::EPGE
dc.contributor.affiliation.none.fl_str_mv FGV
dc.contributor.author.fl_str_mv Cysne, Rubens Penha
dc.subject.area.por.fl_str_mv Economia
topic Economia
Economia
Renda - Distribuição
Desemprego
dc.subject.bibliodata.por.fl_str_mv Economia
Renda - Distribuição
Desemprego
description Several empirical studies in the literature have documented the existence of a positive correlation between income inequalitiy and unemployment. I provide a theoretical framework under which this correlation can be better understood. The analysis is based on a dynamic job search under uncertainty. I start by proving the uniqueness of a stationary distribution of wages in the economy. Drawing upon this distribution, I provide a general expression for the Gini coefficient of income inequality. The expression has the advantage of not requiring a particular specification of the distribution of wage offers. Next, I show how the Gini coefficient varies as a function of the parameters of the model, and how it can be expected to be positively correlated with the rate of unemployment. Two examples are offered. The first, of a technical nature, to show that the convergence of the measures implied by the underlying Markov process can fail in some cases. The second, to provide a quantitative assessment of the model and of the mechanism linking unemployment and inequality.
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