Consumption inequality: micro and macro approaches with applications to France and the U.S. – INEQ_CONSO

We propose studying the interplay between consumption and income inequality over the life cycle in France and the U.S. over the last thirty years. On the one hand, the four quantitative analyses in this project provide direct descriptive evidence based on micro data of the change in consumption inequality. On the other hand, they incorporate economic theoretical models shedding light on economic mechanisms at stake generating inter-individual dispersion in consumption levels. The project can be incorporated in Axe thématique 2: Génèse et dynamique des inégalités from the ANR call for project inégalité-inégalités. The studies detailed below concentrate on the same topics but tackle the issue from different perspectives. They blend micro-econometric, macro general equilibrium and theoretical economic models studying consumption inequality. More precisely, in the first project we assess the share of risk in the consumption distribution. In the second approach we target at measuring the degree of consumption risk-sharing in these economies that the financial market permits. In the third project we endogenize the dispersion of earnings leading to the spreading consumption levels using a human capital model. Finally, in step four, we derive the implications of a policy aiming at correcting consumption and wealth inequalities. These contributions are joint work realized by a team of four researchers with strong quantitative and complementary skills. Finally, the team has yet never benefited from any external funding to develop our research.