A Theory of Earnings Distribution [Hardcover]

This book provides an understanding of the origins of earnings distributions.An understanding of the origins of earnings distributions is of central importance for any public policy which has the aim of combating economic inequality. The aim of this book is to provide a satisfactory theoretical foundation which could serve as the rational basis for such policies.An understanding of the origins of earnings distributions is of central importance for any public policy which has the aim of combating economic inequality. The aim of this book is to provide a satisfactory theoretical foundation which could serve as the rational basis for such policies.An understanding of the origins of earnings distribution is of central importance for any public policy which has the aim of combating economic inequality. This book tries to provide some theoretical foundations that could serve as a rational basis for such policies. The approach, strongly influenced by human capital theory, is especially novel in that it permits individual analyses at three interconnecting levels of aggregation using the same basic microeconomic model: the level of the overall earnings distribution across all age groups; and the distribution of lifetime earnings. The analysis demonstrates the interdependence between age composition, inequality, and public distribution policy. It provides economic interpretations of empirical findings and identifies several policy conflicts. It also addresses the question of how differences between individuals are transformed into income differences.Introduction; 1. The general structure of the model; 2. A life-cycle model of individual earnings; 3. The distribution of earnings within age groups; 4. The overall distribution of earnings; 5. The distribution of lifetime earnings.