Introduction

This essay is a substantial revision of a paper written in 1974 for a seminar dealing with income distribution, employment, and economic development in Southeast and East Asia. The issues raised in the original paper, while seriously complicating the analysis of income inequalities and of their connection with economic growth, seemed to me sufficiently important and illuminating to merit restatement for better understanding and wider consideration

The issues, to put them briefly, are that in a meaningful distribution of income by size the recipient unit has to be a family or household and cannot be a person; that families or households differ substantially in size, as judged by the number of members, either in productive or younger and older ages; that, consequently, the conventional distributions of income among families or households by income per family or household make little sense, since they are affected by changing or different inequalities among families or households by size; that, even after size distributions by income per family or household are converted into distributions of persons by family or household income per person, they still reflect differences in the age of the household head (hereafter “age of head”), in the phases in the lifetime span of a family's income, which obscure our view of the differences in the longer, or lifetime, level of income.