Inequality and the Labour Market (B-KUL-D0M46B)
Aims
This course aims at introducing students into the methodology of measuring welfare, inequality and poverty and changes therein through redistributive programs such as tax and transfer systems.
Upon completion of the course the students will be able
- to process a microdataset with individual data on income and socio-economic charateristics, by calculating individual metrics of welfare and deprivation;
- aggregate the individual metrics to assess social welfare, inequality and poverty represented by the representative micro dataset;
- critically evaluate empirical statements on the level and evolution of inequality, poverty and social welfare in the world, the EU and Belgium;
Previous knowledge
Introductory course in Public Economics.
Is included in these courses of study
- Master of Economics (Leuven) 60 ects.
- Master in de economische wetenschappen (Leuven) 60 ects.
- Master in de toegepaste economische wetenschappen (Leuven) 60 ects.
- Master in de toegepaste economische wetenschappen (Leuven) (Minor: Economie en beleid) 60 ects.
- Master handelsingenieur (Leuven) 120 ects.
- Master handelsingenieur (Leuven) (Minor: Economie) 120 ects.
- Master of Business Economics (Leuven) 60 ects.
- Master of Business Economics (Leuven) (Minor 9: Economics and Policy) 60 ects.
- Master of Business Engineering (Leuven) 120 ects.
- Master of Business Engineering (Leuven) (Minor: Economics) 120 ects.
- Courses for Exchange Students Faculty of Economics and Business (Leuven)
- Master of Sociology (Leuven) 60 ects.
Activities
6 ects. Inequality and the Labour Market (B-KUL-D0M46a)
Content
Part 1: Exposition of the basic tools for measuring the size distribution of income (e.g. Lorenz curves and concentration curves), summarizing this size distribution into aggregate measures of welfare, inequality and poverty. We characterize welfare, inequality and poverty measurement in terms of properties of underlying social welfare functions.
Part 2: Study of the effect of the tax and transfer system on the post tax income distribution: different definitions of progressivity of a tax system; relation between progressivity and changes in the post tax income distribution (with the pre tax income distribution given).
Detailed description of contents:
- The Size Distribution of Income: Basic Tools
- Robust Welfare Comparisons (Stochastic dominance)
- Social Welfare and Inequality Aversion
- Inequality orderings
- Survey of other Measures of Inequality (Gini, Generalised Entropy, …)
- Poverty Measurement
- Inequality and Welfare Measurement in Heterogeneous Populations and multidimensional welfare analysis
- Progressive Income Taxation
- Income Tax Progression and Redistribution (with empirical application)
- Explaining changes in inequality
On completion of the course the students will be able
- to process a microdataset with individual data on income and socio-economic charateristics, by calculating individual metrics of welfare and deprivation;
- to aggregate the individual metrics to assess social welfare, inequality and poverty represented by the representative micro dataset;
- to critically evaluate empirical statements on the level and evolution of inequlaity, poverty and social welfare in the world, the EU and Belgium.
Course material
The lectures are based on:
- Lambert (2001), The Distribution and Redistribution of Income, Manchester University Press, 3rd ed
- Cowell (2011), Measuring Inequality, 3rd edition, Oxford University Press.
- Journal articles and chapters of books, made available (for sale) by the start of the course at Cursusdienst Ekonomika.
- Slides. These do not include additional material, but summarize the lectures. Available on Toledo.
Evaluation
Evaluation: Inequality and the Labour Market (B-KUL-D2M46b)
Explanation
Features of the evaluation
* The exam is written and open book. This means that any form of printed material can be consulted during the exam. A pocket calculator can be used. Electronic devices or any device that has a connection with the outside world (mobiles, i-phones, tablets, laptops, ...) are not allowed.
Determination of final grades
* The grades are determined by the lecturer as communicated via Toledo and stated in the examination schedule. The result is calculated and communicated as a whole number on a scale of 20.
Second examination opportunity
* The features of the evaluation and determination of grades are similar to those of the first examination opportunity, as described above.