The Distributional Incidence of Growth: A Non-Anonymous and Rank Dependent Approach
SERIES Working Papers No.39
27 Pages Posted: 17 Jul 2012 Last revised: 23 Jan 2013
Date Written: July 1, 2012
Abstract
This paper provides a normative framework for the assessment of the distributional incidence of growth. By removing the anonymity axiom, such framework is able to evaluate the individual income changes over time and the reshu ing of individuals along the income distribution that are determined by the pattern of income growth. We adopt a rank dependent social welfare function expressed in terms of initial rank and individual income change and we obtain partial and complete dominance conditions over different growth paths. These dominance conditions account for the di¤erent components determining the overall impact of growth, that is the size of growth and its vertical and horizontal incidence. We then provide an empirical application for Italy: this analysis shows the distributional impact of the recent economic crisis suffered by the Italian populaltion.
Keywords: growth, pro-poor, inequality, income mobility, dominance
JEL Classification: D31, D63, D71
Suggested Citation: Suggested Citation