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come. The income unit for which the figures are given is also of great importance. A distribution for individual income recipients always shows very much greater apparent inequality than a distribution for family units: many of the individuals are housewives working part-time or receiving a small amount of property income, or other family members in a similar position. Is the distribution that is relevant for families one in which the families are classified by total family income? Or by income per person? Or per equivalent unit? This is no mere quibble. I believe that the changing distribution of families by number of children is the most important single factor that has reduced inequality of levels of living in this country during the past half century. It has been far more important than graduated inheritance and income taxes. The really low levels of living were the joint product of relatively low family incomes and relatively large numbers of children. The average number of children has declined and, even more important, this decline has been accompanied and largely produced by a virtual elimination of the very large family. As a result, families now tend to differ much less with respect to number of children. Yet this change would not be reflected in a distribution of families by the size of total family income. |
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A major problem in interpreting evidence on the distribution of income is the need to distinguish two basically different kinds of inequality; temporary, short-run differences in income, and differences in long-run income status. Consider two societies that have the same distribution of annual income. In one there is great mobility and change so that the position of particular families in the income hierarchy varies widely from year to year. In the other, there is great rigidity so that each family stays in the same position year after year. Clearly, in any meaningful sense, the second would be the more unequal society. The one kind of inequality is a sign of dynamic change, social mobility, equality of opportunity; the other, of a status society. The confusion of these two kinds of inequality is particularly important, precisely because competitive free-enterprise capitalism tends to substitute the one for the other. Non-capitalist societies tend to have wider inequality than capitalist, even as measured by annual income; in addition, inequality in them tends to be |
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