Full text: The Personal Distribution of Income

20 
(11) 
q»‘*(y) - q*»(w) * f (K w - y ) 
Row can this series of transf rmati ms square 
an as to produce a steady state of the joint distribution? 
2 0 explain this we have t separate income at least theoretically 
into earned and unearned income, ^he distribution of earned 
inc me has to be regarded as given from outside; its explanation 
has to be sught separately; empirically at any rate it s 
a Pareto distribution. It may be regarded as constant in the 
simplest case. Prom it flows the continuing primary a -cumulation 
which contributes to the accumulation of existing wealth holders 
and also creates new wealth holders ( a kind of social mobility ). 
This wealth then creates property income and secundary accumulation. 
The process leads from a relatively moderate inquall ty of 
earned income to more unequal primary wealth, and even more 
unequal secundary wealth. 
*n this way wa can imagine that total income 
and total vzealth will grow at constant rates. The corresponding 
alloiuetric proportion does not appear directly in the cross-section 
where instead appear the two regression lines which are neither 
of them a reliable estimate of the ratio of the two Fardto coefficients. 
Can this be regarded ad the reason why the attempt 
at empirical verification of equation (8‘) on the basis of Swedish 
and ^vfcsh data lead to unsatisfactory results?
	        

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