The demographics of inequality

This paper presents a survey of recent literature on the effects of demographic variables on economic inequality. First, a number of conceptual and methodological questions are raised and discussed. They pertain to what is meant by inequality, what the range of demographic variables is, and how variable and endogenous are the demographic variables most widely used.The paper then turns to a review of empirical works on the distributive incidence of the following demographic variables: baby boomers entering the job market, aging population, variable fertility and mortality rates, internal and external migrations, divorce and widowhood, and finally donations and bequests. It appears that a lot of caution is needed when assessing the incidence of any demographic variable changing the size of the population because in this case standard inequality measures yield conflicting signals.Presidental address delivered at the second meeting of the European Society for Population Economics, June 23, 1988, Mannheim, FRG. The author is extremely grateful to R. Easterlin, D. Kessler, T. Smeeding, l. Tunali, R. von Weizsäcker, two referees, and the participants in the 1988 Hagen meeting of the Verein für Social politik, Ausschuß Mr Bevölkerungsökonomie, for their comments.