Functional and personal income distributions

Abstract

The economic relations between functional income distribution and the three main personal income distributions --- total income, wealth, and wages --- are not straightforward in the economic literature. This paper presents an attempt to relate the factor shares and these personal income distributions in a more direct and precise manner. Our analytical result proves that the total income Lorenz curve is always above the weighted average of capital income and wages Lorenz curves, where the factor shares are the weights. We also establish a method to estimate income, wages, or wealth personal distributions when one of them does not exists.