The amp;apos'prediction approachamp;apos' proposed by Dearden, Machin and Reed (DMR) consists in (1) regressing the observed incomes of the child and parent families on separate sets of predetermined variables, and (2) regressing the childamp;apos's predicted income on that of the parents....

When families reform there are implications for the income distribution through a number of economic mechanisms: income sharing, changes in household need, reweighting the distribution. These changes are distinct from those that generate changes in factor income or transfers and may affect...