Income inequality has been rising in a number of countries in recent years and has been a growing concern. The total income of high-income households has increased faster than that of low-income households in a number of countries. Similarly, the wage gap between the top 10 per cent and bottom...

The paper revisits regression-based inequality decomposition, derives further theoretical results on the factor shares and applies them in an empirical setting. Noting that the approach based on Shorrocks and Fields is not directly applicable to an important welfare-based inequality index,...