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- W2097341467 abstract "Several empirical studies in the literature have documented the existence of a positive correlation between income inequalitiy and unemployment. I provide a theoretical framework under which this correlation can be better understood. The analysis is based on a dynamic job search under uncertainty. I start by proving the uniqueness of astationary distribution of wages in the economy. Drawing upon this distribution, I provide a general expression for the Gini coefficient of income inequality. The expression has the advantage of not requiring a particular specification of the distribution of wage offers. Next, I show how the Gini coefficient varies as a function of the parameters of the model, and how it can be expected to be positively correlated with the rate of unemployment. Two examples are offered. The first, of a technical nature, to show that the convergence of the measures implied by the underlying Markov process can fail in some cases. The second, to provide a quantitative assessment of the model and of the mechanism linking unemployment and inequality." @default.
- W2097341467 created "2016-06-24" @default.
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- W2097341467 date "2004-01-01" @default.
- W2097341467 modified "2023-09-25" @default.
- W2097341467 title "On the Positive Correlation between Income Inequality and Unemployment" @default.
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- W2097341467 doi "https://doi.org/10.2139/ssrn.2393988" @default.
- W2097341467 hasPublicationYear "2004" @default.
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