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The purpose of this paper is to investigate how changes in the distribution of pre retirement labour earnings affect post‐retirement income in the UK.

The authors estimate a PROBIT model and perform a counterfactual simulation to assess the effects of changes in the earnings distributions on pensions in the UK. The paper uses data from the British Household Panel Survey (BHPS).

The distribution of labour earnings before retirement plays a considerable role in the pension distribution of current retirees, particularly for low and medium incomes in the period 1991‐2007 for the UK. Improvements in Social Security have lifted many out of poverty; however there is still a gender gap as it is found that the current system of public and private schemes has not substantially improved pension income dispersion among women. On the other hand, changes in labour earning distributions have benefited more poor female pensioners than male.

The paper uses BHPS data, which is a longitudinal panel of survey questions made to UK households between 1991 and 2007. The level of detail of such data allows the study of the complete distributions of pre and post retirement income rather than focussing only on some measures of dispersion.

This paper aims to show the interrelation and relevancy of the concept and theory of cultural lag to social justice. The conception of social justice, though wide in scope, is applied in this paper to the limited domain of equality of opportunity and fairness with respect to income distribution.Design/methodology/approach – The methodology of this paper is holistic and interdisciplinary, and interrelates the social and the economic in the overall dynamics of general culture evolution.Findings – The “inverted U‐curve hypothesis” of Simon Kuznets implies that a greater equality of income distribution would be forthcoming in an economy characterized by a mature phase of modern economic growth. Empirical evidence demonstrates that such a movement toward greater equality is subject to question. The American experience of the 1920s and the period from 1973 to the present offers evidence to question the U‐curve hypothesis. Contrary to expectations, during these periods income distribution became more unequal. These periods, indicative of maladjustment, are used to demonstrate and serve as examples of cultural lags. The concept and theory of cultural lag exposes the need for prerequisite institutional adjustment. It consequently appears that the American institutional structure, currently directing the economy toward a policy orientation of laissez‐faire and the resulting increased inequality of income distribution, is anachronistic to a modern industrial society oriented toward the goal of social justice.Originality/value – Relevant to the quest of social justice.

Given the fact that the income disparity has become extremely severe in rural China, the purpose of this paper is to examine heterogeneity in food consumption among various income classes and to investigate the impact of changes in income distribution patterns on food demand in rural China.

In this study, the authors partition the households into five income classes according to the distribution of household per capita net income. Using household data drawn from the China Health and Nutrition Survey in 2011, a two-stage demand model is applied to estimate a food demand system for each of the income classes. After obtaining the estimated income elasticities of eight studied food groups for each income class, the authors then examine the responsiveness of food demand to the changes in income distribution by means of four scenarios with varying income distribution.

The empirical results indicate that substantial differences in food consumption exist across various income classes. Specifically, the lowest-income households are more sensitive to price and income changes for most studied food groups than the highest-income households are. In general, income responsiveness is higher for meats, aquatic products and dairy products. Based on estimated income elasticities, the projected food consumption under different income distribution patterns shows that changes in income distribution have significant influences on food consumption. In addition, the authors conclude that a more equal distribution of income would be associated with a higher demand for food in rural China.

This paper employs a two-stage demand model to estimate food demand in rural China by income classes. The results imply substantial differences in food demand for various income classes. Therefore, income distribution should be taken into account instead of an average estimation for the population as a whole when investigating food demand in rural China. Given the significant changes in income distribution in rural China, this study provides several important policy implications to alleviate income inequality and poverty, as well as to improve nutrition for lower-income classes.

Before the economic reforms, the main problem in the distribution of income in China had been egalitarianism. The economic reforms are aimed at widening the gap between individual incomes in order to raise efficiency and achieve the aim of the common prosperity of all members of the society. This is the same as the result of Kuznet′s research. Before the reforms, China practised a policy of freezing wages and prices for a long period, leading to a situation unfavourable to the young generation in the distribution of income. The situation is undergoing a change in the economic reforms. China mainly adopted the non‐market method in the distribution of consumer goods before the economic reforms, which call for wider use of the market method.

Points out that differences in the background of the working population, are often made responsible for the observed inequality of income distribution. Explores whether the observed distribution in incomes in countries such as the Federal Republic of Germany (West and East), Great Britain, Sweden, the United States and Brazil could not be the result of a statistical distribution process in which households participate. Recalls the early work in statistical thermodynamics by Boltzmann and Maxwell, who studied the distribution of energy among an ensemble of identical molecules, and which showed that not all molecules hold the same energy, but rather that the distribution has an exponential fall‐off character, with most molecules being in the lower energy bracket. Adapts the Maxwell‐Boltzmann distribution to incomes, and transforms these distributions into well‐known Lorenz graphs, and obtains a perfect match for each examined country. Suggests that, as the distributions can be directly related to their corresponding statistical weights, and as their logarithms are proportional to entropy in statistical thermodynamics, it could be shown that the unequal income distribution has a higher entropy, and therefore is more stable than the corresponding low entropy distribution resulting from Boulding′s principle of equal advantage where all households earn the same income. Supposes that neither of the two extreme stand‐points to explain the inequality of incomes can lead to a totally satisfactory explanation. Proposes that evolutionary strategies may be an interesting lead to follow up in more detail.

The purpose of this paper is to study the dynamics of the distribution of per capita income of Indian states in the post‐reform period, in order to identify trends towards convergence‐club formation, polarization or stratification during this period.

The authors adopt the “distribution dynamics” framework that involves estimating kernel density functions, stochastic kernels and ergodic distributions in order to identify these trends.

The results show that there is polarization in India in the post‐reform period and this is due to the contrary growth dynamics of the middle‐income states resulting in the “vanishing middle” of the distribution.

This is the first study that highlights the contrary growth dynamics among the middle‐income states as the driving force behind the polarization of Indian states in the post‐reform period.

The authors analyse how the association between parental background and adult children's earnings changes when net rather than gross children's earnings are considered and disentangle what such changes depend on: differences between pre and after taxes earnings inequality or reranking of individuals along the earnings distribution before and after taxes.

Using data from European Union Statistics on Income and Living Conditions (EU-SILC) 2011, the authors focus on two large European countries, Italy and Poland, with comparable levels of inequality and background-related earnings premia but very different personal income tax (PIT) design and estimate – at both the mean and the deciles of the earnings distribution – the association between parents' characteristics and children's gross and net earnings.

The authors find that in Italy the PIT reduces the magnitude of the association between parental background and adult children's earnings at the top of the distribution, while no effects emerge for Poland, and the reduction is mostly due to a decrease in earnings inequality rather than to a re-ranking of children along the distribution. The findings are confirmed when the authors simulate the introduction of a “quasi flat tax” regime in Italy.

The findings suggest that the higher the tax progressivity, the higher the background-related inequality reduction and the lower the intergenerational association, signalling that the degree of progressivity amongst children may be an effective weapon to reduce intergenerational inequality.

In the literature on intergenerational inequality, the role of taxes is usually overlooked. In this paper, the authors try to fill this gap and enquire how the PIT design affects the association between parental background and adult children's earnings.

There has been growing interest in recent years in modelling various poverty‐related issues. However, there have not been many attempts at empirical estimation of best‐fit income distribution functions with an objective of subsequent use in poverty focused models. The purpose of this paper is to fill this gap by empirically estimating best‐fit income distribution functions for different household income groups and computing poverty and inequality indices for Sri Lanka.

The authors empirically estimated a number of popular distribution functions found in the income distribution literature to find the best‐fit income distribution using household income and expenditure survey data for Sri Lanka and subsequently estimated various poverty and inequality measures.

The results show that the income distributions of all low‐income household groups follow the beta general probability distribution. The poverty measures derived using these distributions show that among the different income groups, the estate low‐income group has the highest incidence of poverty, followed by the rural low‐income group.

According to the best of the authors' knowledge, empirical estimation of income distribution functions for South Asia has never been attempted. The results of this study, even though based on Sri Lankan data, will be relevant to most developing countries in South Asia and will be very useful in developing poverty alleviation strategies.

Though Indian economy since 1980s has expanded very rapidly, yet the benefits of growth remain very unequally distributed. The purpose of this paper is to provide new evidence about the shape, intensity and decomposition of inequality change between 2005 and 2012. The authors find that Gini, as a measure of income inequality, has increased irrespective of geographic regions.

Based on a recent distribution analysis tool, “ABG,” the paper focuses on local inequality, and summarizes the shape of inequality in terms of three inequality parameters (α, β and γ) to examine how the income distributions have changed over time. Here, the central coefficient (α) measures inequality at the median level, with adjustment parameters at the top (β) and bottom (γ).

The results reveal that at the middle of distribution (α), there is almost the same inequality in both the periods, but the coefficients on the curvature parameters β and γ show that there is increasing inequality in the subsequent period. Finally, an analysis of decomposition of inequality change suggests that though income growth was progressive, however, this equalizing effect was more than offset by the disequalizing effect of income reranking.

This paper shows how it can be possible both for “the poor” to fare badly relatively to “the rich” and for income growth to be pro-poor.

This paper stresses the significance of inequality reduction.

Inequality reduction is very much imperative in ending poverty and boosting shared prosperity.

Perhaps, this research work is first of its kind to examine the shape and decomposition of change in income inequality in India in recent years.

The aim of this paper is to extend a theoretical model due to Ljungqvist and data from a sample of 19 developing economies to empirically test it.

Data for all variables are from the 2005 Human Development Report and the 2006 World Development Report. The author applies the least‐squares estimation technique in a multivariate linear regression.

Based on data from the World Bank and the United Nations Development Programme, the paper uses a sample of 19 developing economies and finds that cross‐country variations in income/consumption inequality may be explained by inequality of investment in human capital as measured by inequalities in child health as well as inequality in education and by inequality in the distribution of land as measured by the land Gini index.

Assuming a population consisting of skilled laborers, unskilled laborers, educators/health care personnel, and farmers, the paper shows that starting from an initial distribution of assets and in the absence of a perfect capital market along with human capital exhibiting increasing returns it is possible to have persistent inequality in the distribution of income or consumption. Regression results also are consistent with the theoretical implication of the model as the extent of inequality in land distribution and in access to education as well as inequalities in child health do linearly influence income or consumption inequality as measured by the ratio of the share of income or consumption accounted for by the richest quintile to that of the poorest quintile. As a result, if governments in developing countries aim to reduce inequality, they need to implement programs designed to reduce inequalities in child health by allowing children from the poorest of the poor to get fully immunized, which in turn would lead to a reduction in infant and child mortality and in education by providing low‐income families with means so that their children have better access to education. Government land policies, on the other hand, that succeed in reducing inequality in land distribution in developing countries, may be beneficial in terms of lessening income/expenditure inequality. Finally, while the present model does not test for the impact that improving capital markets would have, it stands to reason that improving capital markets could also have an impact on decreasing inequality.

In this paper the author uses a model due to Ljungqvist to show that individuals are relatively wealthy because they either own a fixed input such as land or they are able to invest in human capital, which in turn allow them to earn sufficient rent or labor income to remain wealthy. On the other hand, poor people either do not own land or are not capable of investing in human capital, and, as a result, earn low incomes and remain poor. This joint causation of factor endowment or human capital investment and income helps explain income distribution. Using data from the United Nations Development Programme and the World Bank for a sample of 19 developing economies, it is found that cross‐country variations in income/consumption inequality may be explained by inequality of investment in human capital as measured by inequalities in child health as well as well as inequality in education and by inequality in the distribution of land as measured by the land Gini index. These results will help governments in developing countries identify areas that need to be improved upon in order to reduce income/consumption inequality.