How to measure the progressivity of an income component

Abstract

We argue that a general measure of progressivity should consider the ordering of the final incomes and not, as is usual, the ordering before the inclusion of the component being analysed. We also show that the general measure of progressivity is relevant in the decomposition of changes in the overall Gini index by components of income.

Keywords:

• Gini index
• income
• inequality
• progressivity

JEL Classification:

• D31
• D63

Notes

¹An extended version of this article, including proofs and more references, is available upon request from [email protected].