On the Positive Correlation between Income Inequality and Unemployment
The Review of Economics and Statistics
2009
Two papers published in this journal (Jantti, 1994, and Mocan, 1999), among others, find empirical evidence that “increases in structural unemployment have a substantial aggravating impact on income inequality.” The main point of this work is to show that standard job-search models can help us understand this empirical regularity. As a byproduct of the analysis, the paper also provides a closed-form general expression that enables direct calculation of the Gini coefficient of wage-income inequality as a function of any arbitrary initial distribution of wage offers. Three numerical examples illustrate the results.
- DOI
- 10.1162/rest.91.1.218
- Volume
- 91 (1)
- Pages
- 218-226
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref