Gender and Income Inequality

In this chapter, gender is identified as a hidden dimension in the current debate about and analysis of economic inequality. When it comes to measuring personal income inequality, intra-household inequality is omitted as the standard approach is to compute inequality measures based on household disposable income, assuming that resources are pooled and equally shared within the household. Two strands of the literature are reviewed which contribute to understanding the extent and underlying forces of the resulting bias in income inequality measurement. First, the literature on decision-making within the household provides theoretical and empirical insights showing that different pooling and sharing patterns exist across households, and that gender is a relevant category in shaping intra-household inequality. Second, the literature which aims to capture the gender-specific distribution of wealth enables to gain insights into the gender-specific distribution of capital income and to infer about aspects of bargaining power. Putting existing theoretical and empirical evidence together reveals that opening the black box of the household is crucial to obtain reliable measures of gender as well as overall income inequality, and to guide the design of redistributive policy.