A New Framework for the Analysis of Inequality
This paper presents a new framework for analyzing inequality that moves beyond the anonymity postulate. We estimate the determinants of sectoral choice and the joint distributions of outcomes across sectors. We determine which components of realized earnings variability are due to uncertainty and which components are due to components of human diversity that are forcastable by agents. Using our tools, we can determine how policies shift persons across sectors and outcome distributions across sectors.
This research was supported by NIH R01-HD32058-3, NSF SES-024158, and a grant from the American Bar Foundation. A website for supplementary material is available at http://jenni.uchicago.edu/frame-ineq. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
Cunha, Flavio & Heckman, James, 2008. "A New Framework For The Analysis Of Inequality," Macroeconomic Dynamics, Cambridge University Press, vol. 12(S2), pages 315-354, September. citation courtesy of