Dynamics of Income Inequality in Sweden

Abstract

This paper investigates income inequality among individuals in Sweden overtime using generalized entropy measures in short-run (annual) and long-run (medium term) from 1978 to 1990. The results suggest that short-run inequality tends to decrease with fluctuations, partially due to transitory components. Long-run inequality declines in early years due to smoothing of transitory components. Further decline in long0run inequality is due to actual equalization. Gender, cohort, marital status, and region are used to investigate their implications. Between-group inequality due to gender and cohort are shown to be significant part of inequality. Within-group equalizations are generally more pronounced. Distinct group specific differences are observed. {Copyright 2000 Elsevier Science Inc. All rights reserved}