Measurement of inequality with a finite number of pay states: the majorization set and its applications

B-Tier
Journal: Economic Theory
Year: 2018
Volume: 65
Issue: 1
Pages: 99-123

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Abstract In this paper we examine the Lorenz ordering when the number of pay states is finite, as is most often the case in public sector employment. We characterize the majorization set: the set of pay scales such that some distribution u is more egalitarian than another distribution v, with u and v being two distributions of a given sum total. We show that while this set is infinite, it is generated as the convex hull of a finite number of points. We then discuss several applications of the result, including the problem of reducing inequality between groups, conditions under which different pay scales may reverse the ordering of two Lorenz curves, and the use of the majorization set in relation to optimal income taxation.

Technical Details

RePEc Handle
repec:spr:joecth:v:65:y:2018:i:1:d:10.1007_s00199-016-1011-2
Journal Field
Theory
Author Count
1
Added to Database
2026-01-24