What is the Contribution of Intra-household Inequality to Overall Income Inequality? Evidence from Global Data, 1973-2013

TL;DR

This paper quantifies the significant contribution of intra-household inequality to overall income inequality globally from 1973 to 2013, highlighting its importance often overlooked in inequality studies.

Contribution

It provides comprehensive empirical evidence that intra-household inequality accounts for at least 30% of total income inequality across diverse countries and decades.

Findings

Intra-household inequality can constitute up to one-third of total inequality.

Neglecting intra-household inequality leads to underestimating true inequality levels.

The study uses a normative measure to assess welfare implications.

Abstract

Intra-household inequality continues to remain a neglected corner despite renewed focus on income and wealth inequality. Using the LIS micro data, we present evidence that this neglect is equivalent to ignoring up to a third of total inequality. For a wide range of countries and over four decades, we show that at least 30 per cent of total inequality is attributable to inequality within the household. Using a simple normative measure of inequality, we comment on the welfare implications of these trends.