Income Stratification and Income Inequality

This paper develops a new index of stratification that highlights the distinction between inequality and stratification. The stratification index captures the extent to which population subgroups occupy distinct strata within an overall distribution. The indices are group specific and control for group size. A weighted sum of group stratification indices is the third term that, together with between‐group inequality and a weighted sum of within‐group inequality adds to the overall Gini index of inequality.