We study decennial anonymous and non‐anonymous growth incidence curves in the United States during the past 50 years. The former show income growth by quantile independent of initial incomes and are typically upward sloping, reflecting increasing inequality. The latter are conditional on initial ranks and are flat or downward sloping. This suggests distributional neutrality of growth when accounting for initial income positions. We explain this difference by decomposing the non‐anonymous curves into mobility and shape components. The former is always downward sloping, whereas the latter is upward sloping in periods of increasing inequality. Thus, flat non‐anonymous curves can be observed even with increasing inequality. We exploit the decomposition to show that the slope of non‐anonymous curves in the United States is determined by the evolution of cross‐sectional income distributions. This enables inferring the shape of non‐anonymous curves from cross‐sectional data and test them for a generalized pro‐poorness social welfare criterion.
{"title":"Evaluating the Distributive Incidence of Growth Using Cross‐sections and Panels","authors":"Yonatan Berman, François Bourguignon","doi":"10.1111/roiw.12681","DOIUrl":"https://doi.org/10.1111/roiw.12681","url":null,"abstract":"We study decennial anonymous and non‐anonymous growth incidence curves in the United States during the past 50 years. The former show income growth by quantile independent of initial incomes and are typically upward sloping, reflecting increasing inequality. The latter are conditional on initial ranks and are flat or downward sloping. This suggests distributional neutrality of growth when accounting for initial income positions. We explain this difference by decomposing the non‐anonymous curves into mobility and shape components. The former is always downward sloping, whereas the latter is upward sloping in periods of increasing inequality. Thus, flat non‐anonymous curves can be observed even with increasing inequality. We exploit the decomposition to show that the slope of non‐anonymous curves in the United States is determined by the evolution of cross‐sectional income distributions. This enables inferring the shape of non‐anonymous curves from cross‐sectional data and test them for a generalized pro‐poorness social welfare criterion.","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":"2015 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2024-02-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139954799","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A chained price index is said to suffer from chain drift bias if it indicates an overall price change, even though the prices and quantities in the current period have reverted back to their levels of the base period. The empirical relevance of this bias is well documented in studies that apply sub‐annual chaining to scanner data. There it is shown that stockpiling can lead to downward chain drift bias. The present paper draws attention to the fact that smoothing consumption causes substantial upward chain drift. In addition, this study introduces a stochastic simulation approach that is consistent with both, stockpiling and consumption smoothing. A “stress test” is conducted that examines whether rolling window variants of multilateral indices (GEKS, TPD, and GK) effectively curtail the chain drift problem.
{"title":"Inflation measurement in the presence of stockpiling and consumption smoothing","authors":"Ludwig von Auer","doi":"10.1111/roiw.12682","DOIUrl":"https://doi.org/10.1111/roiw.12682","url":null,"abstract":"A chained price index is said to suffer from chain drift bias if it indicates an overall price change, even though the prices and quantities in the current period have reverted back to their levels of the base period. The empirical relevance of this bias is well documented in studies that apply sub‐annual chaining to scanner data. There it is shown that stockpiling can lead to <jats:italic>downward</jats:italic> chain drift bias. The present paper draws attention to the fact that smoothing consumption causes substantial <jats:italic>upward</jats:italic> chain drift. In addition, this study introduces a stochastic simulation approach that is consistent with both, stockpiling and consumption smoothing. A “stress test” is conducted that examines whether rolling window variants of multilateral indices (GEKS, TPD, and GK) effectively curtail the chain drift problem.","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":"97 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2024-02-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139954828","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper focuses on the international trade in services related to intangible assets and intellectual property products (IPP), and it explores to what extent they might be used as a channel to shift the profits of multinational firms to tax havens. Using survey data on Italian firms, we first provide a geographical and sectoral analysis of Italy's trade in IPP services. We then estimate the amount of profit shifted abroad by foreign-owned firms in our sample, applying at various levels of aggregation a methodology recently put forward in the literature. Finally, we look for a correlation at the firm level between estimated shifted profits and imports of IPP services. We find that while the overall correlation is very low, there is a small cluster of firms displaying a positive correlation between these two variables.
{"title":"Trade in services related to intangibles and the profit shifting hypothesis","authors":"Nadia Accoto, Stefano Federico, Giacomo Oddo","doi":"10.1111/roiw.12673","DOIUrl":"https://doi.org/10.1111/roiw.12673","url":null,"abstract":"This paper focuses on the international trade in services related to intangible assets and intellectual property products (IPP), and it explores to what extent they might be used as a channel to shift the profits of multinational firms to tax havens. Using survey data on Italian firms, we first provide a geographical and sectoral analysis of Italy's trade in IPP services. We then estimate the amount of profit shifted abroad by foreign-owned firms in our sample, applying at various levels of aggregation a methodology recently put forward in the literature. Finally, we look for a correlation at the firm level between estimated shifted profits and imports of IPP services. We find that while the overall correlation is very low, there is a small cluster of firms displaying a positive correlation between these two variables.","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":"20 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2024-02-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139762322","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Are excessively concentrated markets inequitable as well as inefficient? We explore this issue by analyzing the degree of market concentration in the industries where Australia's wealthiest made their fortunes. Compared with the economy at large, we find that top wealth holders have tended to make their fortunes in industries with a higher-than-average degree of market concentration. Top wealth shares have grown substantially, and from 1990 to 2020, there appears to have been an increase in the propensity of top wealth holders to make their fortunes in highly concentrated industries.
{"title":"Inequality and Market Concentration: New Evidence from Australia","authors":"Lachlan Hotchin, Andrew Leigh","doi":"10.1111/roiw.12679","DOIUrl":"https://doi.org/10.1111/roiw.12679","url":null,"abstract":"Are excessively concentrated markets inequitable as well as inefficient? We explore this issue by analyzing the degree of market concentration in the industries where Australia's wealthiest made their fortunes. Compared with the economy at large, we find that top wealth holders have tended to make their fortunes in industries with a higher-than-average degree of market concentration. Top wealth shares have grown substantially, and from 1990 to 2020, there appears to have been an increase in the propensity of top wealth holders to make their fortunes in highly concentrated industries.","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":"26 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2024-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139679811","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
While quality-adjusted indices tracing the evolutions of regional house prices are increasingly available, this is less the case for data on regional house price levels. Yet, such information is fundamental to assess housing affordability and barriers to labour mobility. This article puts forward a method to compile regional house price levels that are consistent with the evolutions given by house price indices, representative of the underlying stock of dwellings, and based on the information on house price levels that is available at all dates rather than in a single reference period. Results for Spain show that the decline in house prices following the 2008–2009 crisis initially reduced the dispersion in house prices across Spanish regions, but this dispersion has increased again afterwards. Moreover, the relative housing affordability of Madrid deteriorated compared to all other Spanish regions in the last decade. Monitoring whether COVID-19 will reverse this trend will be key.
{"title":"Estimating regional house price levels","authors":"Pierre-Alain Pionnier, Johannes Schuffels","doi":"10.1111/roiw.12676","DOIUrl":"https://doi.org/10.1111/roiw.12676","url":null,"abstract":"While quality-adjusted <i>indices</i> tracing the evolutions of regional house prices are increasingly available, this is less the case for data on regional house price <i>levels</i>. Yet, such information is fundamental to assess housing affordability and barriers to labour mobility. This article puts forward a method to compile regional house price levels that are consistent with the evolutions given by house price indices, representative of the underlying stock of dwellings, and based on the information on house price levels that is available at all dates rather than in a single reference period. Results for Spain show that the decline in house prices following the 2008–2009 crisis initially reduced the dispersion in house prices across Spanish regions, but this dispersion has increased again afterwards. Moreover, the relative housing affordability of Madrid deteriorated compared to all other Spanish regions in the last decade. Monitoring whether COVID-19 will reverse this trend will be key.","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":"19 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2024-01-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139679808","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
How much do parents spend on children in the U.S.? While the U.S. Department of Agriculture (USDA) regularly addresses this question, it considers only money expenditures, omitting the sizeable monetary value of parental time. The 2017 and 2019 Panel Study of Income Dynamics offers a unique opportunity to provide a more complete picture. Analysis of this data reveals considerable substitutability between unpaid and paid childcare and generates estimates of average total expenditures that include a replacement cost estimate of the value of parental time. These estimates, constructed for comparability with USDA measures, reveal both higher levels of average parental expenditure and different patterns across household structure and income. These findings challenge public policies that use USDA estimates as a reference point for setting the child support obligations of non-custodial parents and reimbursement rates for foster care. They also undermine many conventional equivalence scales and measures of income/time poverty.
{"title":"Parental Expenditures of Time and Money on Children in the U.S.","authors":"Leila Gautham, Nancy Folbre","doi":"10.1111/roiw.12672","DOIUrl":"https://doi.org/10.1111/roiw.12672","url":null,"abstract":"How much do parents spend on children in the U.S.? While the U.S. Department of Agriculture (USDA) regularly addresses this question, it considers only money expenditures, omitting the sizeable monetary value of parental time. The 2017 and 2019 Panel Study of Income Dynamics offers a unique opportunity to provide a more complete picture. Analysis of this data reveals considerable substitutability between unpaid and paid childcare and generates estimates of average total expenditures that include a replacement cost estimate of the value of parental time. These estimates, constructed for comparability with USDA measures, reveal both higher levels of average parental expenditure and different patterns across household structure and income. These findings challenge public policies that use USDA estimates as a reference point for setting the child support obligations of non-custodial parents and reimbursement rates for foster care. They also undermine many conventional equivalence scales and measures of income/time poverty.","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":"108 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2024-01-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139501417","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The current System of National Accounts (SNA) Gross Domestic Product (GDP) concept does not measure the income generated by the production sector since it includes depreciation and excludes capital gains and losses on assets used in the production sector. The paper suggests an accounting framework that measures the income generated by the production sector of an economy and implements this measure using the Augmented Productivity Database (APDB) developed by Asian Productivity Organization and Keio University for China over the years 1970–2020. Real gross and real net income generated by the Chinese production sector are decomposed into explanatory factors including TFP growth using the framework suggested by Jorgenson and Diewert and Morrison. TFP growth is further decomposed into technical progress and inefficiency components using the nonparametric approach developed by Diewert and Fox. The APDB has estimates for the price and quantity of agricultural, industrial, commercial, and residential land used in China. The paper argues that changes in land use should be treated in the same manner as inventory change and added to the alternative output measures. It turns out that Jorgensonian user costs for land are frequently negative. The problems associated with negative user costs are discussed in the paper.
{"title":"Improving the SNA: Alternative measures of output, input, income, and productivity","authors":"W. Diewert, Koji Nomura, C. Shimizu","doi":"10.1111/roiw.12677","DOIUrl":"https://doi.org/10.1111/roiw.12677","url":null,"abstract":"The current System of National Accounts (SNA) Gross Domestic Product (GDP) concept does not measure the income generated by the production sector since it includes depreciation and excludes capital gains and losses on assets used in the production sector. The paper suggests an accounting framework that measures the income generated by the production sector of an economy and implements this measure using the Augmented Productivity Database (APDB) developed by Asian Productivity Organization and Keio University for China over the years 1970–2020. Real gross and real net income generated by the Chinese production sector are decomposed into explanatory factors including TFP growth using the framework suggested by Jorgenson and Diewert and Morrison. TFP growth is further decomposed into technical progress and inefficiency components using the nonparametric approach developed by Diewert and Fox. The APDB has estimates for the price and quantity of agricultural, industrial, commercial, and residential land used in China. The paper argues that changes in land use should be treated in the same manner as inventory change and added to the alternative output measures. It turns out that Jorgensonian user costs for land are frequently negative. The problems associated with negative user costs are discussed in the paper.","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":"30 5","pages":""},"PeriodicalIF":2.0,"publicationDate":"2024-01-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139441639","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper studies how industries' investment in organizational capital (OC) and workforce skills relate to productivity, building on OECD estimates of OC, output data from the OECD Structural Analysis (STAN) database, and skill indicators from the OECD Programme for the International Assessment of Adult Competencies (PIAAC). The paper finds that, at the industry level, workers' numeracy and Science, Technology, Engineering and Mathematics (STEM) skills correlate positively with productivity, and that the positive correlation of STEM skills with productivity is generally larger for OC workers. Moreover, dispersion in Information and Communication Technology (ICT) skills harms industry performance. In fact, a gap between the ICT skills of OC and non-OC workers seems to trigger a “lost in translation” type of mechanism, whereby communication and information flows become less fluid and impinge upon the economic performance of sectors, correlating negatively with productivity.
{"title":"Organizational Capital, Skills and Productivity","authors":"Emile Cammeraat, Lea Samek, Mariagrazia Squicciarini","doi":"10.1111/roiw.12663","DOIUrl":"https://doi.org/10.1111/roiw.12663","url":null,"abstract":"This paper studies how industries' investment in organizational capital (OC) and workforce skills relate to productivity, building on OECD estimates of OC, output data from the OECD Structural Analysis (STAN) database, and skill indicators from the OECD Programme for the International Assessment of Adult Competencies (PIAAC). The paper finds that, at the industry level, workers' numeracy and Science, Technology, Engineering and Mathematics (STEM) skills correlate positively with productivity, and that the positive correlation of STEM skills with productivity is generally larger for OC workers. Moreover, dispersion in Information and Communication Technology (ICT) skills harms industry performance. In fact, a gap between the ICT skills of OC and non-OC workers seems to trigger a “lost in translation” type of mechanism, whereby communication and information flows become less fluid and impinge upon the economic performance of sectors, correlating negatively with productivity.","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":"11 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2024-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139423005","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using household data from 1988 to 2018, we confirm that the increase in income inequality in China has come to a halt in recent years but show that inequality in wealth and consumption continues to increase. We report a clear convergence of inequality across the different dimensions of income, consumption, and wealth. Households at the top of one dimension are increasingly located at the top of the other two dimensions. The mechanisms for such convergence across dimensions are analyzed. The savings rate links income and consumption, while capital accumulation is the central mechanism linking income and wealth. In addition, the wealth and income structure contribute to intensifying the convergence trend. We argue that the relatively high level of inequality in China may continue since income, consumption and wealth are increasingly reinforcing each other.
{"title":"Convergence of Inequality Dimensions in China: Income, Consumption, and Wealth from 1988 to 2018","authors":"Haiyuan Wan, Bjorn Gustafsson, Yingfei Wang","doi":"10.1111/roiw.12675","DOIUrl":"https://doi.org/10.1111/roiw.12675","url":null,"abstract":"Using household data from 1988 to 2018, we confirm that the increase in income inequality in China has come to a halt in recent years but show that inequality in wealth and consumption continues to increase. We report a clear convergence of inequality across the different dimensions of income, consumption, and wealth. Households at the top of one dimension are increasingly located at the top of the other two dimensions. The mechanisms for such convergence across dimensions are analyzed. The savings rate links income and consumption, while capital accumulation is the central mechanism linking income and wealth. In addition, the wealth and income structure contribute to intensifying the convergence trend. We argue that the relatively high level of inequality in China may continue since income, consumption and wealth are increasingly reinforcing each other.","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":"25 19","pages":""},"PeriodicalIF":2.0,"publicationDate":"2024-01-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139448543","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Samuel Tetteh-Baah, Kenneth Harttgen, Rahul Lahoti, Isabel Günther
We estimate horizontal inequality across the African continent over time based on four identity cleavages—location, ethnicity, gender, and religion—and four well-being indicators—education, asset ownership, child nutrition, and under-five survival. Improvements in social indicators over the last 25 years appear to be equalizing, with a decline in most horizontal inequalities. However, most countries in Africa show higher levels of horizontal inequalities than countries in Asia or Latin America. Spatial inequalities remain particularly high in Africa, but there is also high variation in levels and trends of horizontal inequalities across the African continent. For example, education inequality across identity cleavages seems to be particularly high in West African countries, whereas ethnic inequality across well-being indicators seems to be particularly high in Southern African countries. Various African countries have even witnessed a recent increase in specific horizontal inequalities. Our results support policymakers in identifying the most severe and deteriorating forms of horizontal inequality in their countries.
{"title":"Horizontal Inequalities in Africa","authors":"Samuel Tetteh-Baah, Kenneth Harttgen, Rahul Lahoti, Isabel Günther","doi":"10.1111/roiw.12669","DOIUrl":"https://doi.org/10.1111/roiw.12669","url":null,"abstract":"We estimate horizontal inequality across the African continent over time based on four identity cleavages—location, ethnicity, gender, and religion—and four well-being indicators—education, asset ownership, child nutrition, and under-five survival. Improvements in social indicators over the last 25 years appear to be equalizing, with a decline in most horizontal inequalities. However, most countries in Africa show higher levels of horizontal inequalities than countries in Asia or Latin America. Spatial inequalities remain particularly high in Africa, but there is also high variation in levels and trends of horizontal inequalities across the African continent. For example, education inequality across identity cleavages seems to be particularly high in West African countries, whereas ethnic inequality across well-being indicators seems to be particularly high in Southern African countries. Various African countries have even witnessed a recent increase in specific horizontal inequalities. Our results support policymakers in identifying the most severe and deteriorating forms of horizontal inequality in their countries.","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":"53 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2024-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139422974","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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