DP11719 | Intra-Household Inequality and Overall Inequality

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12/22/2016

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Abstract

Assessing the specific contribution of intra-household inequality to standard measures of overall inequality and poverty is an underdeveloped area of research and policy analysis. However, intra-household inequality is clearly important. It is argued in this paper that neglecting intra-household inequality could lead to (i) an understatement of inequality and an overstatement of the impact of growth on poverty reduction; (ii) a mis-statement of the potential impact of minimum wage policies on poverty; (iii) mis-design of transfer policies to reduce inequality and poverty. Any discussion of inequality in the welfare state cannot afford to ignore intra-household inequality.