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Begin New Search Topic Economic Inequality Publication Year within 25 Years

21. Wage effects of employer-mediated transfers

Author:
Santiago Garriga and Dario Tortarolo
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP)
Abstract:
We explore how the way in which tax credits are disbursed affects employer’s behavior, wages, and employment. We exploit a change in the payment system in Argentina that was gradually rolled out between 2003 and 2010. Under the old system, employers were in charge of delivering family allowances to their employees together with the monthly salary, and the transfer was deducted from employer social security contributions. For transparency purposes, the government eliminated the intermediary role of firms and started depositing the transfer directly into workers’ bank accounts. Using employer-employee administrative data and an event-study approach, we show that the way tax credits are disbursed matters for the final economic incidence. Our evidence suggests that employers shift part of the incidence of the transfer by paying lower wages. We document larger wage effects in small and less unionized firms and we do not find evidence of pay equity concerns (e.g., effect mostly driven by new hires rather than incumbent workers). Our findings are therefore in line with the hypothesis that transfers are not all captured dollar for dollar by workers. These results raise questions about the use of employers as intermediaries to disburse the transfer; where less salient schemes may lead to capture by employers.
Topic:
Economics, Labor Issues, Employment, Work Culture, and Economic Inequality
Political Geography:
Argentina and Latin America

22. The political economy of competition, regulation and transformation: Black Economic Empowerment (BEE) and quota allocations in South African industrial fisheries

Author:
Thando Vilakazi and Stefano Ponte
Publication Date:
09-2020
Content Type:
Working Paper
Institution:
Centre for Business and Development Studies (CBDS), Copenhagen Business School
Abstract:
Power asymmetries in value chains mean that inequalities in returns, access to key resources and share of value added are reinforced and skewed against smaller players. Policies put in place to enforce market rules and ensure fairness can be ineffective in the context of entrenched market power, lack of competition, and high levels of control by lead firms over key resources and rights – necessitating different rules of the game to change the inequalities. Under these circumstances, transformation and economic participation of marginalized groups are unlikely to be achieved, with important socio-economic and political implications. South Africa’s Black Economic Empowerment (BEE) policies and competition laws target economic redress and inclusion of historically disadvantaged people in the ownership and control of economic activity and productive assets. BEE criteria have been embedded in a number of industry empowerment charters, a Broad-Based BEE Act and a series of codes of implementation. South Africa’s competition law is well-established and effectively implemented. Yet, the impacts of these instruments have been frustratingly limited and slow, especially in sectors where a few companies dominate. The paper draws on secondary sources and in-depth interviews with industry players in the South African Hake Deep Sea Trawl (HDST) fishery to examine the interactions between industrial fishery quota allocations by the government, BEE policy, and competition dynamics as they impact on allocation of finite access to national resource endowments. It shows that, even in one of the most regulated sectors of South Africa’s economy, large incumbents maintain a disproportionate amount of bargaining power vis-à-vis smaller players in HDST fishery, both upstream and downstream, and throughout the domestic and global value chains. We conclude that as long as rules protect incumbency, inequality will be sustained. Even where scale economies are at play, quota allocation, transformation and competition regulation should go hand in hand to facilitate the effective participation of black-owned businesses as competitors in the hake value chain.
Topic:
Economics, Markets, Race, Economic Inequality, Economic Policy, Participation, Fishing, and Value Chains
Political Geography:
South Africa

23. Distributional National Accounts (DINA) for Austria, 2004-2016

Author:
Stefan Jestl and Emanuel List
Publication Date:
02-2020
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper constructs distributional national accounts for Austria for the period 2004-2016. We enrich survey data with tabulated tax data and make it fully consistent with national accounts data. The comprehensive dataset allows us to analyse the distribution of macroeconomic growth across the income distribution and to explore the evolution of income inequality in pre-tax income over time. Our results suggest that the distribution of growth has changed over time, which had considerable repercussions on inequality. Inequality started to decline at the very beginning of the economic and financial crisis in 2007, however it has increased again after 2012. We further provide novel insights into the evolution of capital income for top income groups and explore redistribution mechanisms that operated in Austria. Government spending was found to play a key role for redistributive effects across the income distribution. In particular, the transfer system redistributes pre-tax income to a large extent.
Topic:
Migration, Labor Issues, and Economic Inequality
Political Geography:
Europe and Austria

24. Income Segregation and Intergenerational Mobility Across Colleges in the United States

Author:
Raj Chetty, John N. Friedman, Emmanuel Saez, Nicholas Turner, and Danny Yagan
Publication Date:
02-2020
Content Type:
Research Paper
Institution:
Watson Institute for International and Public Affairs at Brown University
Abstract:
We construct publicly available statistics on parents’ incomes and students’ earnings outcomes for each college in the U.S. using de-identified data from tax records. These statistics reveal that the degree of parental income segregation across colleges is very high, similar to that across neighborhoods. Differences in post-college earnings between children from low- and high-income families are much smaller among students who attend the same college than across colleges. Colleges with the best earnings outcomes predominantly enroll students from high-income families, although a few mid-tier public colleges have both low parent income levels and high student earnings. Linking these income data to SAT and ACT scores, we simulate how changes in the allocation of students to colleges affects segregation and intergenerational mobility. Equalizing application, admission, and matriculation rates across parental income groups conditional on test scores would reduce segregation substantially, primarily by increasing the representation of middle-class students at more selective colleges. However, it would have little impact on the fraction of low-income students at elite private colleges because there are relatively few students from low-income families with sufficiently high SAT/ACT scores. Differences in parental income distributions across colleges could be eliminated by giving low and middle-income students a sliding-scale preference in the application and admissions process similar to that implicitly given to legacy students at elite private colleges. Assuming that 80% of observational differences in students’ earnings conditional on test scores, race, and parental income are due to colleges’ causal effects – a strong assumption, but one consistent with prior work – such changes could reduce intergenerational income persistence among college students by about 25%. We conclude that changing how students are allocated to colleges could substantially reduce segregation and increase intergenerational mobility, even without changing colleges’ educational programs
Topic:
Income Inequality, Economic Inequality, Higher Education, and Economic Mobility
Political Geography:
North America and United States of America

25. Capital, Inequality, and Compulsory Savings: Australia’s Superannuation System in the Context of Piketty

Author:
Brody Viney
Publication Date:
05-2020
Content Type:
Journal Article
Journal:
Journal of Public and International Affairs (JPIA)
Institution:
School of Public and International Affairs (SPIA), Princeton University
Abstract:
A fundamental aspect of economic inequality, highlighted by Thomas Piketty’s Capital in the Twenty-first Century, is the unequal distribution of capital ownership (wealth). This not only undermines the welfare of individuals with low wealth, but exacerbates the distributional consequences of a declining labor share of income. However, policy responses to wealth inequality remain underdeveloped. This paper considers how policies that increase the private savings of low- and middle-income individuals can complement more traditional taxation and redistribution approaches. As a case study, it explores the distributional effects of Australia’s superannuation system, a private retirement savings scheme that sets a compulsory minimum savings rate for all employees. Superannuation has contributed to a more equal distribution of wealth in Australia, particularly by offsetting declines in other kinds of wealth among those at the low end of the distribution. However, loopholes have also allowed high-income individuals to use the system to save in a low-tax environment. Further work is needed to investigate the effects of compulsory savings rates on those with very low incomes.
Topic:
Labor Issues, Capitalism, Tax Systems, and Economic Inequality
Political Geography:
Australia and Asia-Pacific

26. Gendered laws and women in the workforce

Author:
Marie Hyland, Simeon Djankov, and Pinelopi Koujianou Goldberg
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
This paper provides the first global look at how gender discrimination by the law affects women’s economic opportunity and charts the evolution of legal inequalities over five decades. Using the World Bank’s newly constructed Women, Business and the Law database, it documents large and persistent gender inequalities, especially with regard to pay and treatment of parenthood. The paper finds positive correlations between more equal laws pertaining to women in the workforce and more equal labor market outcomes, such as higher female labor force participation and a smaller wage gap between men and women.
Topic:
Gender Issues, Labor Issues, Women, Inequality, and Economic Inequality
Political Geography:
Global Focus

27. Women scaling the corporate ladder: Progress steady but slow globally

Author:
Soyoung Han and Marcus Noland
Publication Date:
05-2020
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
Despite steady progress, women remain grossly underrepresented in corporate leadership worldwide. The share of women executive officers and board members increased between 1997 and 2017, but progress was not uniform. Partly in response to gender quotas, the shares of female board members have risen rapidly in some countries while lagging elsewhere. This Policy Brief reports results derived from the financial records of about 62,000 publicly listed firms in 58 economies over 1997–2017, which together account for more than 92 percent of global GDP. The authors conclude that if, as emerging evidence in the literature indicates, gender diversity contributes to superior firm performance, then progress in this area could help boost productivity globally. Policymakers and corporate leaders should consider supportive public and private policies, including more gender-neutral tracking in education, firm protocols that encourage gender balance in hiring and promotion, enforceable antidiscrimination laws, public support for readily available and affordable high-quality childcare and maternity and paternity leave, and quotas.
Topic:
Gender Issues, Women, Economic Inequality, and Private Sector
Political Geography:
Global Focus

28. Explaining Wellbeing and Inequality in Cameroon: A Regression-Based Decomposition

Publication Date:
01-2020
Content Type:
Research Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
This study sets out to estimate the determinants of household economic wellbeing and to evaluate the relative contributions of regressed-income sources in explaining measured inequality. In particular, a regression-based decomposition approach informed by the Shapley value, the instrumental variables econometric method, and the 2007 Cameroon household consumption survey, was used. This approach provides a flexible way to accommodate variables in a multivariate context. The results indicate that the household stock of education, age, credit, being bilingual, radio and electricity influence wellbeing positively, while rural, land and dependency had a negative impact on wellbeing. Results also show that rural, credit, bilingualism, education, age, dependency and land, in that order, are the main contributors to measured income inequality, meanwhile, the constant term, media and electricity are inequality reducing. These findings have policy implications for the ongoing drive to scale down both inequality and poverty in Cameroon.
Topic:
Development, Economics, Poverty, Inequality, Economic Inequality, and Economic Policy
Political Geography:
Africa and Cameroon

29. Why, When, and How to Teach the Fundamentals of Inequality in Principles

Author:
Can Erbil and Geoffrey Sanzenbacher
Publication Date:
08-2020
Content Type:
Policy Brief
Institution:
Economics for Inclusive Prosperity (EfIP)
Abstract:
The continued rise of economic inequality in the U.S. has been on the radar of economists and policymakers for the last few years. New initiatives and platforms like EfIP (Economics for Inclusive Prosperity) have emerged, where economists work on creating fresh and useful policy ideas to promote more “inclusive” models of generating prosperity. Yet, students still face a lot of confusion, “noise,” and disagreement when it comes to the topic of inequality.[1] Especially in the age of easy access to information online, students not fully literate in economics struggle to sift through the literature and separate rigorous scientifically based research from opinion pieces. This article discusses a way to introduce some recent trends in U.S. inequality to students, and then delve into a specific topic (e.g., racial inequality) in a two-lecture module at the end of an introductory economics course. After all, it is not that the students are not interested in this topic. But, left alone, many of them become confused. Students do not make distinctions between different broad types of inequalities, such as income inequality, wealth inequality, or inequality of opportunity. They do not understand differences in the underlying causes of inequality, which vary depending on whether the topic is inequality across educational groups, gender-based groups, or racial/ethnic groups. And, they make basic mistakes in reading articles or viewing data, such as mixing-up correlation with causation or looking at graphs with different scales. Fortunately, introductory economics courses have a chance to reach students early in their careers, and correct many of these deficiencies. Indeed, recent events in the US compel us to cover inequality and its consequences in our introductory classes. The economic impact of the COVID-19 epidemic falls significantly more on minorities, women, people with lower income levels and people of color.[2] And, the disparities in poverty and opportunity rates between black and non-black populations is at the root of racial discrimination which re-ignited the BLM movement.[3] Indeed, economic inequality is also related to other disciplines in Social Sciences, such as Sociology, Political Science and even Liberal Arts courses such as History and English. However, Economics faculty are well-equipped to cover the empirical outcomes and the underlying economic models – and lay out their strengths as well as short-comings. Given that teaching about economic inequality is an important task, this article will first discuss when it makes sense to teach it. The article will then spend the majority of its time providing some tips for covering the material, as well as some suggested assignments.
Topic:
Economics, Education, Inequality, Economic Inequality, Macroeconomics, and Models
Political Geography:
United States

30. Rebooting the Innovation Agenda

Author:
Daniel F. Runde
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
The fourth industrial revolution is underway, and technological changes will disrupt economic systems, displace workers, concentrate power and wealth, and erode trust in public institutions and the democratic political process. Up until now, the focus has largely been on how technology itself will impact society, with little attention being paid to the role of institutions. The relationship between societies and their institutions is changing, and countries will have to strengthen their capacities to avoid heightened social divisions. They must build resilience through gradual and intentional interventions designed for long-term, sustainable development. It is also essential that institutions work hard to build credibility and use available development tools, such as development finance institutions and foreign aid, to mitigate the risks of disruption. Countries and other stakeholders must pioneer these initiatives to successfully navigate the disruptions stemming from the fourth industrial revolution. The revision of existing models of education, skill development and investment and the integration of different stakeholders into the conversation will be critical in helping institutions play a productive role in rebooting the innovation agenda. This new report, Rebooting the Innovation Agenda, analyzes the need for resilient institution and the role they are expected to play in the fourth industrial revolution.
Topic:
Industrial Policy, Democracy, Economic Inequality, and Industrialization
Political Geography:
Global Focus