Re: (OPE-L) Re: tendencies for equalization

From: Ian Wright (iwright@GMAIL.COM)
Date: Thu Oct 28 2004 - 13:17:49 EDT

Hi Jerry

> In response to my comment that we should not expect a long-
> term "relative stability in wage disparities" you wrote "But I do not
> expect that, and did not state that."  In the very next sentence you
> wrote: "... we should expect wage disparities to be invariant in a
> market economy ...."

No Jerry, your comment was "we would expect -- given existing
inequalities -- that if there were such a tendency than it would
manifest itself empirically in a long-term _decline_ in wage
disparities rather than relative stability in wage disparities." The
emphasis is yours.

The "decline" is what I would not expect, and what I did not state.
This was very clear in my last post.

> You wrote:  "There is nothing here about a long-term trend to
> narrow the wage dispersion, or stability of wage disparities."
> There is a claim, though, that "we should expect wage disparities
> to be invariant."   Please excuse me for thinking that the claim
> that "we should expect wage disparities to be invariant"  was
> synonymous with a claim that, "while wage dispersion will wax
> and wane",  there  would be a long-term trend towards wage
> stability.

I think this is the first occasion when I used less than clear
phrasing, so my apologies for any confusion caused. My point was that
the two possible empirical manifestations of the tendency to equalise
that I suggested (narrower dispersion than otherwise, unimodality) are
not claims about a historical decline in the dispersion, or about wage
stability. I think the functional form is stable over time based on
the empirical evidence I've surveyed. The parameters change however.

> You wrote that "the exponential distribution is a reasonable fit
> for 90-95% for the income of all groups in  industrialised
> countries over a period of several decades."  Yet, you have
> not confronted the empirical evidence cited in the Arrighi
> article which suggests that what you call "the usual functional
> forms" might not have held during the time period that you
> were referring to.

But the Arrighi article, which I found interesting, does not cite
empirical evidence that connects with my claims about the empirical
manifestation of the tendency to equalise. Neither does it talk about
the functional forms of the income distribution in China. I would be
very interested if anyone has any pointers to empirical surveys of the
functional form of the income distribution in China. It may indeed
have different features due to its transition from a command economy
with high employment in agriculture. A brief search on the web didn't
yield much.

Best wishes,


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