Macroeconomic adjustment, socio-demographic change, and the evolution of income distribution in Cote d'Ivoire: a decomposition by microsimulation

Macroeconomic adjustment, socio-demographic change, and the evolution of income distribution in Cote d'Ivoire: a decomposition by microsimulation

What phenomena contributed to income inequality in Cote d'Ivoire

This paper proposes a microeconomic decomposition of the evolution of income inequality in Cote d'Ivoire in the 1990s. This allows for the disentangling of the simultaneous contributions of four types of phenomena to the evolution of the distribution of income. These include:

  • a change in the remuneration rates of the observed and unobserved earnings determinants
  • a change in the occupational preferences
  • a change in the socio-demographic population structure

The article shows that the increase of income inequality in Abidjan was the result of changes in the socio-demographic population structure; changes in unobserved earnings determinants. However higher activity, in flows in wage labour, a drop in the returns to schooling, and the Ivorian/Non-Ivorian wage differential worked toward a more equal distribution. The article draws attention to the fact that negative income growth in Abidjan as well as the positive income growth in rural Cote d'Ivoire, were connected with rising inequality.

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