Title: Generalised percentile ratios as robust measures of labour earnings inequality

Authors: Shuaizhang Feng, Richard V. Burkhauser

Addresses: School of Economics, Shanghai University of Finance and Economics, Guoding Road 777, Yangpu District, Shanghai, 200433, China. ' Department of Policy Analysis and Management, Cornell University, 125 MVR Hall, Ithaca, NY 14853, USA

Abstract: We propose a class of generalised percentile ratios as an alternative to the P₉₀ / P₁₀ ratio for measuring labour earnings inequality. We show that they are more robust to sampling the variation and rounding error prevalent in interview-based surveys, as demonstrated through a Monte Carlo simulation and with Current Population Survey labour earnings data from 1987 to 2005. We find a smoother upward trend in the P₉₀ / P₁₀ ratio over this period than what is shown with conventionally measured P₉₀ / P₁₀ ratios.

Keywords: percentile ratios; robustness; labour earnings inequality.

DOI: 10.1504/IJDATS.2008.021113

International Journal of Data Analysis Techniques and Strategies, 2008 Vol.1 No.2, pp.117 - 125

Published online: 04 Nov 2008 *

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