This paper proposes a microeconomic decomposition of the evolution of income inequality in Cote dIvoire in the 1990s, allowing the in-depth analysis of simultaneous contributions of four types of phenomena to the evolution of the distribution of income:
A change in the remuneration rates of observed earnings determinants
A change in the remuneration rates of unobserved earnings determinants
A change in occupational preferences
A change in the socio-demographic population structure
The increase in income inequality in Abidjan was the result of changes in the socio-demographic population structure and of changes in unobserved earnings determinants, even though higher activity, inflows in wage labour, a drop in returns to schooling, and the Ivorian/Non-Ivorian wage differential worked toward a more equal distribution.
Both negative income growth in Abidjan as well as positive income growth in rural Cote dIvoire, were connected with rising inequality.