Author Description

We consider the changes in BC inequality in a number of different ways: broad trends using the gini coefficient (the most common summary index of inequality); changes in incomes for different income groups; the shares of income accruing to each income group; and, the ratio of incomes at the top, bottom and middle of the distribution. [...] A large part of the increase in inequality stems from the near-collapse of incomes at the bottom of the distribution. [...] If changes in inequality appear more at the top or bottom of the distribution, they may not be adequately captured by the gini.3 This paper also examines changes in the average income of different income groups over time, and the ratio of the average income at the top, bottom and middle of the distribution. [...] For the bottom five vingtiles (25% of the population), the absolute decline in income (not shown) was greater after taxes and transfers than it was for market income.7 To further illustrate the changes over time, Figure 4a shows that the changes in average income for the bottom vingtile are not aberrations for the year 2000. [...] As a result of the gains at the top and losses at the bottom, the ratio of market incomes of the top vingtile to the bottom vingtile grew dramatically over the 1992-2000 period.