Decomposing US Income Inequality À La Shapley: Race Matters, but Gender Too

27 Pages Posted: 10 Feb 2020

See all articles by Frédéric Chantreuil

Frédéric Chantreuil

University of New Caledonia

Kévin Fourrey

CEETEPS - Centro Paula Souza

Isabelle Lebon

Université de Caen

Therese Rebiere

Conservatoire National des Arts et Métiers; IZA Institute of Labor Economics

Abstract

This paper is an application of a new Shapley income decomposition methodology, in which we isolate two subjective factors in income differences - race and gender - that contribute to income inequality within the population of blacks and whites in the United States over the period 2005-2017. We show that the purely racial contribution to income inequality as defined by the Gini index varies from 1% to 4% depending on the geographical administrative divisions used. Race tends to contribute more to inequality in the Western and Southern part of the country. Whatever the division, the share of income inequality associated with gender exceeds greatly that of race. While gender income inequality falls over time, income inequality associated with race tends to increase.

Keywords: income inequality, decomposition, Shapley value, racial discrimination, gender discrimination

JEL Classification: C71, D63, J15, J71

Suggested Citation

Chantreuil, Frédéric and Fourrey, Kévin and Lebon, Isabelle and Rebiere, Therese, Decomposing US Income Inequality À La Shapley: Race Matters, but Gender Too. IZA Discussion Paper No. 12950, Available at SSRN: https://ssrn.com/abstract=3534498 or http://dx.doi.org/10.2139/ssrn.3534498

Frédéric Chantreuil (Contact Author)

University of New Caledonia

Department of Economics
BPR4 - 98851 Nouméa Cedex
New Caledonia

Kévin Fourrey

CEETEPS - Centro Paula Souza ( email )

Rua dos Bandeirantes, 169
Sao Paulo, Sao Paulo 00000000
Brazil

Isabelle Lebon

Université de Caen ( email )

F-14032 Caen Cedex
France

Therese Rebiere

Conservatoire National des Arts et Métiers ( email )

292 rue Saint Martin
Paris, 75003
France

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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