Pub Date : 2024-01-19DOI: 10.25071/1874-6322.40591
Samuel Bowles, Wendy Carlin
We show that Corrado Gini’s “concentration ratio” is an informative measure of experienced inequality that (as he pointed out) varies from one (his “maximum concentration”) to zero (“minimum concentration”), a feature that does not hold (except in infinite populations) for the measure advocated in the contribution to this symposium by our colleague, Debraj Ray. Through a social network representation of inequality and a series of examples, we clarify the differing intuitions about the nature of inequality that alternative measures of inequality capture.
{"title":"Axioms and Intuitions about Societal Inequality","authors":"Samuel Bowles, Wendy Carlin","doi":"10.25071/1874-6322.40591","DOIUrl":"https://doi.org/10.25071/1874-6322.40591","url":null,"abstract":"We show that Corrado Gini’s “concentration ratio” is an informative measure of experienced inequality that (as he pointed out) varies from one (his “maximum concentration”) to zero (“minimum concentration”), a feature that does not hold (except in infinite populations) for the measure advocated in the contribution to this symposium by our colleague, Debraj Ray. Through a social network representation of inequality and a series of examples, we clarify the differing intuitions about the nature of inequality that alternative measures of inequality capture. ","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-01-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139613412","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-11-18DOI: 10.25071/1874-6322.40538
Sridevi Yerrabati
Most people at the lower end of the income spectrum in developing countries rely on vulnerable employment for their survival. In the absence of alternative sources of income, vulnerable employment narrows income inequality (inequality) by providing income to these workers. This study examines this assertion by using data from a panel of 65 developing countries covering 1995-2019. The empirical analysis is based on dynamic panel data models. Two critical findings emerge from this study. First, in developing countries, vulnerable employment reduces inequality, although the reduction is quite marginal. Second, vulnerable employment has a gender-specific effect on narrowing inequality. Specifically, male vulnerable employment has a greater impact on reducing inequality than its female counterpart. In light of the efforts of developing countries to reduce inequality (SDG 10) and to provide decent work for all (SDG 8), this study is of particular importance.
{"title":"Does vulnerable employment narrow income inequality? Evidence from developing countries","authors":"Sridevi Yerrabati","doi":"10.25071/1874-6322.40538","DOIUrl":"https://doi.org/10.25071/1874-6322.40538","url":null,"abstract":"Most people at the lower end of the income spectrum in developing countries rely on vulnerable employment for their survival. In the absence of alternative sources of income, vulnerable employment narrows income inequality (inequality) by providing income to these workers. This study examines this assertion by using data from a panel of 65 developing countries covering 1995-2019. The empirical analysis is based on dynamic panel data models. Two critical findings emerge from this study. First, in developing countries, vulnerable employment reduces inequality, although the reduction is quite marginal. Second, vulnerable employment has a gender-specific effect on narrowing inequality. Specifically, male vulnerable employment has a greater impact on reducing inequality than its female counterpart. In light of the efforts of developing countries to reduce inequality (SDG 10) and to provide decent work for all (SDG 8), this study is of particular importance.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-11-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139262014","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-07-23DOI: 10.25071/1874-6322.40444
Kevin Lee, Steven Mark Miller, Adrian Tippit
It is generally accepted in the academic literature that economic growth, global free trade and the development of financial services are the main factors that affect poverty and income inequality in emerging market nations. However, there is currently no conclusive evidence to show how social impact investing through the use of microfinance institutions (MFIs) affects poverty and income inequality. This paper examines the impact of MFI outreach after controlling for economic growth, economic development, and the development of financial services. We find that even after controlling for these factors, MFIs can provide an additional reduction in both poverty and income inequality.
{"title":"The Impact of Microfinance on Poverty and Income Inequality","authors":"Kevin Lee, Steven Mark Miller, Adrian Tippit","doi":"10.25071/1874-6322.40444","DOIUrl":"https://doi.org/10.25071/1874-6322.40444","url":null,"abstract":"It is generally accepted in the academic literature that economic growth, global free trade and the development of financial services are the main factors that affect poverty and income inequality in emerging market nations. However, there is currently no conclusive evidence to show how social impact investing through the use of microfinance institutions (MFIs) affects poverty and income inequality. This paper examines the impact of MFI outreach after controlling for economic growth, economic development, and the development of financial services. We find that even after controlling for these factors, MFIs can provide an additional reduction in both poverty and income inequality.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122715588","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-06-17DOI: 10.25071/1874-6322.40500
V. Hlasny, Shireen Alazzawi
This study examines how workers’ pre-existing socio-economic profiles andcross-border return-migration experiences affect their lifetime andintergenerational transmission of economic status in three Middle East andNorthern Africa (MENA) countries. We apply transition analysis andinstrumental variable regressions to seven harmonized Labor Market PanelSurveys - Egypt (1998, 2006, 2012), Jordan (2010, 2016), and Tunisia(2014) - to link the current economic outcomes of prime-age male workersto those in prior years and to those of their fathers. Real earnings in prioryears are imputed using the historic positions of individuals, as well as thejob-type and occupation group cell means observed in the survey year. Wefind that migration decisions and destinations are driven by economic,geographic, and family-history considerations. Return migrants landhigher-earning jobs and are more mobile across generations thannever-migrants. They outperform non-migrants, not only now but also inprevious years and, according to evidence, even before their migration spell.After controlling for mitigating factors, the role of migration disappears,implying that individual-level effects and demographics are responsible.
{"title":"Return Migration and Earnings Mobility in the Middle East and North Africa","authors":"V. Hlasny, Shireen Alazzawi","doi":"10.25071/1874-6322.40500","DOIUrl":"https://doi.org/10.25071/1874-6322.40500","url":null,"abstract":"This study examines how workers’ pre-existing socio-economic profiles andcross-border return-migration experiences affect their lifetime andintergenerational transmission of economic status in three Middle East andNorthern Africa (MENA) countries. We apply transition analysis andinstrumental variable regressions to seven harmonized Labor Market PanelSurveys - Egypt (1998, 2006, 2012), Jordan (2010, 2016), and Tunisia(2014) - to link the current economic outcomes of prime-age male workersto those in prior years and to those of their fathers. Real earnings in prioryears are imputed using the historic positions of individuals, as well as thejob-type and occupation group cell means observed in the survey year. Wefind that migration decisions and destinations are driven by economic,geographic, and family-history considerations. Return migrants landhigher-earning jobs and are more mobile across generations thannever-migrants. They outperform non-migrants, not only now but also inprevious years and, according to evidence, even before their migration spell.After controlling for mitigating factors, the role of migration disappears,implying that individual-level effects and demographics are responsible.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-06-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127666331","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-06-11DOI: 10.25071/1874-6322.40392
Michael Ertl, S. Humer, Mathias Moser, M. Schnetzer
This paper analyzes the mismatch of capital income information between household surveys and macro aggregates in the Eurozone. We contrast data from recent EU-SILC and HFCS waves with Eurostat national accounts for single components of capital income. We find a considerable gap between micro and macro data even when carefully considering comparability issues. On average, EU-SILC and HFCS cover only 26% and 22% of national accounts totals in the Eurozone countries. We further assess which amount of this gap that can be traced back to (a) the undercoverage of the top in survey data and (b) general underreporting of capital income across the distribution. To calculate augmented capital incomes, we utilize wealth information from HFCS and apply Pareto estimations and varying rates of return to capital.
{"title":"The micro-macro gap for capital income in the Eurozone","authors":"Michael Ertl, S. Humer, Mathias Moser, M. Schnetzer","doi":"10.25071/1874-6322.40392","DOIUrl":"https://doi.org/10.25071/1874-6322.40392","url":null,"abstract":"This paper analyzes the mismatch of capital income information between household surveys and macro aggregates in the Eurozone. We contrast data from recent EU-SILC and HFCS waves with Eurostat national accounts for single components of capital income. We find a considerable gap between micro and macro data even when carefully considering comparability issues. On average, EU-SILC and HFCS cover only 26% and 22% of national accounts totals in the Eurozone countries. We further assess which amount of this gap that can be traced back to (a) the undercoverage of the top in survey data and (b) general underreporting of capital income across the distribution. To calculate augmented capital incomes, we utilize wealth information from HFCS and apply Pareto estimations and varying rates of return to capital.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-06-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132068882","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-02-16DOI: 10.25071/1874-6322.40410
Kévin Fourrey, Isabelle Lebon, F. Chantreuil
Many European countries claim the struggle against wage inequality between men and women to be one of their priorities. Quantifying the real effects that should have been observed if such wage equalization was achieved remains to be done. A Shapley decomposition of the wage inequality allows to determine the a priori impact of a policy that removes the pay gap between men and women for a given age and education level. It also explains how interactions between personal characteristics lead to the obtained result. This economic policy tool is then illustrated with the wage distribution data of the French Labor Survey.
{"title":"Gender gap correction: How can the evolution of wage inequality be explained?","authors":"Kévin Fourrey, Isabelle Lebon, F. Chantreuil","doi":"10.25071/1874-6322.40410","DOIUrl":"https://doi.org/10.25071/1874-6322.40410","url":null,"abstract":"Many European countries claim the struggle against wage inequality between men and women to be one of their priorities. Quantifying the real effects that should have been observed if such wage equalization was achieved remains to be done. A Shapley decomposition of the wage inequality allows to determine the a priori impact of a policy that removes the pay gap between men and women for a given age and education level. It also explains how interactions between personal characteristics lead to the obtained result. This economic policy tool is then illustrated with the wage distribution data of the French Labor Survey.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-02-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115456499","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-11-17DOI: 10.25071/1874-6322.40385
Michael S. Gideon, Misty L. Heggeness, Marta Murray-Close, S. Myers
There are wide and persistent gender and race differences in wage and salary incomes. Much of the literature attempting to explain these differences relies on self-reported earnings. Many self-reported wages and salary incomes differ, however, from those reported by employers. These errors can bias the measurement of the returns to education and the decomposition of racial and gender earnings gaps. This article examines the implications of using selfreported data for measuring gender and race disparities in earnings. We find that relative to employer-reported data, self-reports understate the wage and salary incomes of black women with low educational levels and overstate the returns to higher education for black women. These previously unexplored and unrecognised findings of bias in the estimation of the returns to black women’s education and the large understatement of earnings among less-well educated black women have implications for interpreting the sources of race and gender earnings inequality.
{"title":"The Returns to Education and the Determinants of Race and Gender Earnings Gaps Using Self-Reported versus Employer-Reported Earnings Data","authors":"Michael S. Gideon, Misty L. Heggeness, Marta Murray-Close, S. Myers","doi":"10.25071/1874-6322.40385","DOIUrl":"https://doi.org/10.25071/1874-6322.40385","url":null,"abstract":"There are wide and persistent gender and race differences in wage and salary incomes. Much of the literature attempting to explain these differences relies on self-reported earnings. Many self-reported wages and salary incomes differ, however, from those reported by employers. These errors can bias the measurement of the returns to education and the decomposition of racial and gender earnings gaps. This article examines the implications of using selfreported data for measuring gender and race disparities in earnings. We find that relative to employer-reported data, self-reports understate the wage and salary incomes of black women with low educational levels and overstate the returns to higher education for black women. These previously unexplored and unrecognised findings of bias in the estimation of the returns to black women’s education and the large understatement of earnings among less-well educated black women have implications for interpreting the sources of race and gender earnings inequality.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-11-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121052793","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-10-02DOI: 10.25071/1874-6322.40547
S. Chakravarty, N. Chattopadhyay
A growth vector is often considered as pro-poor if it generates a reductionin poverty. A second approach to pro-poorness states that growth shouldbe higher for the poor than for the non-poor. In this article, we develop ananalytical approach by considering a compromise between these two notionsof pro-poorness.
{"title":"A Compromise Approach to the Measurement of Pro-Poorness","authors":"S. Chakravarty, N. Chattopadhyay","doi":"10.25071/1874-6322.40547","DOIUrl":"https://doi.org/10.25071/1874-6322.40547","url":null,"abstract":"A growth vector is often considered as pro-poor if it generates a reductionin poverty. A second approach to pro-poorness states that growth shouldbe higher for the poor than for the non-poor. In this article, we develop ananalytical approach by considering a compromise between these two notionsof pro-poorness.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-10-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126902689","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-10-02DOI: 10.25071/1874-6322.40549
S. Chakravarty, Manipushpak Mitra, Suresh Mutuswami, Rupayan Pal
We axiomatically characterise the probability-ratio index of electoralcompetition, which is based on the vote shares of parties competing in anelection. It is the ratio between the probabilities that two voters drawn atrandom with (without) replacement voted for different parties under actualvote shares across the competing parties and under equal vote shares acrossthem. This vote-share concentration-based measure is characterised usingtwo simple axioms, consistency in aggregation and competitive indifference.The former expresses the index as a weighted sum of competitiveness intwo-party elections. The latter is concerned with the redistribution of voteshares across parties.
{"title":"A Vote-Share Concentration-Based Axiomatic Characterisation of the Probability-Ratio Index of Electoral Competition","authors":"S. Chakravarty, Manipushpak Mitra, Suresh Mutuswami, Rupayan Pal","doi":"10.25071/1874-6322.40549","DOIUrl":"https://doi.org/10.25071/1874-6322.40549","url":null,"abstract":"We axiomatically characterise the probability-ratio index of electoralcompetition, which is based on the vote shares of parties competing in anelection. It is the ratio between the probabilities that two voters drawn atrandom with (without) replacement voted for different parties under actualvote shares across the competing parties and under equal vote shares acrossthem. This vote-share concentration-based measure is characterised usingtwo simple axioms, consistency in aggregation and competitive indifference.The former expresses the index as a weighted sum of competitiveness intwo-party elections. The latter is concerned with the redistribution of voteshares across parties.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-10-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132014733","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-10-02DOI: 10.25071/1874-6322.40543
A. Enami, Patricio Larroulet, N. Lustig
The Kakwani index of progressivity is commonly used to establish whetherthe effect of a specific tax or transfer is equalizing. In the presence ofreranking or Lambert’s conundrum, however, a progressive tax could beunequalizing. While it is mathematically possible for counter-intuitiveresults to occur, how common are they in actual fiscal systems? Using anovel dataset that includes fiscal-incidence results for 39 countries, we findthat the likelihood of the Kakwani index to be progressive (regressive),while the tax or transfer is unequalizing (equalizing), is minimal, except inthe case of indirect taxes: in roughly 25 per cent of our sample, regressiveindirect taxes are equalizing (sign-inconsistent cases). Additionally, thelikelihood that the Kakwani index ranks the magnitude of the impact of atax or transfer wrongly also exists but it too is small. Finally, usingregression analysis, we find that increasing the size or progressivity of aprogressive tax or transfer is equalizing and statistically robust forsign-consistent cases. For sign-inconsistent cases, the coefficient for theKakwani index is not statistically significant. In sum, although theKakwani index could yield interpretations that are inaccurate in actualfiscal systems, the risk seems small, except for indirect taxes.
{"title":"How Accurate is the Kakwani Index in Predicting Whether a Tax or a Transfer is Equalizing?","authors":"A. Enami, Patricio Larroulet, N. Lustig","doi":"10.25071/1874-6322.40543","DOIUrl":"https://doi.org/10.25071/1874-6322.40543","url":null,"abstract":"The Kakwani index of progressivity is commonly used to establish whetherthe effect of a specific tax or transfer is equalizing. In the presence ofreranking or Lambert’s conundrum, however, a progressive tax could beunequalizing. While it is mathematically possible for counter-intuitiveresults to occur, how common are they in actual fiscal systems? Using anovel dataset that includes fiscal-incidence results for 39 countries, we findthat the likelihood of the Kakwani index to be progressive (regressive),while the tax or transfer is unequalizing (equalizing), is minimal, except inthe case of indirect taxes: in roughly 25 per cent of our sample, regressiveindirect taxes are equalizing (sign-inconsistent cases). Additionally, thelikelihood that the Kakwani index ranks the magnitude of the impact of atax or transfer wrongly also exists but it too is small. Finally, usingregression analysis, we find that increasing the size or progressivity of aprogressive tax or transfer is equalizing and statistically robust forsign-consistent cases. For sign-inconsistent cases, the coefficient for theKakwani index is not statistically significant. In sum, although theKakwani index could yield interpretations that are inaccurate in actualfiscal systems, the risk seems small, except for indirect taxes.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-10-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122724148","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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