Abstract Wage inequality has risen in many countries over recent decades. At the same time, production has become increasingly concentrated in a small number of firms. In this paper, we show that these two phenomena are linked. Theoretically, we show that an increase in consumer price sensitivity will lead to an increase in the sectoral concentration of revenues and employment, as well as an increase in wage dispersion between firms within industries. Empirically, we use industry‐level data from 14 European countries over the period 1999–2016 and show robust evidence of a positive and statistically significant correlation between concentration and between‐firm wage inequality. We show that this is driven by higher market shares and higher wages in high‐productivity firms within more concentrated sectors. This article is protected by copyright. All rights reserved.
{"title":"Rising concentration and wage inequality","authors":"Guido Matias Cortes, Jeanne Tschopp","doi":"10.1111/sjoe.12547","DOIUrl":"https://doi.org/10.1111/sjoe.12547","url":null,"abstract":"Abstract Wage inequality has risen in many countries over recent decades. At the same time, production has become increasingly concentrated in a small number of firms. In this paper, we show that these two phenomena are linked. Theoretically, we show that an increase in consumer price sensitivity will lead to an increase in the sectoral concentration of revenues and employment, as well as an increase in wage dispersion between firms within industries. Empirically, we use industry‐level data from 14 European countries over the period 1999–2016 and show robust evidence of a positive and statistically significant correlation between concentration and between‐firm wage inequality. We show that this is driven by higher market shares and higher wages in high‐productivity firms within more concentrated sectors. This article is protected by copyright. All rights reserved.","PeriodicalId":47929,"journal":{"name":"Scandinavian Journal of Economics","volume":"33 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135768739","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract We study optimal income taxation in a two‐group framework where the private cost of misreporting income is positively correlated with productivity. If high‐wage types always reveal their income truthfully, then letting low‐wage types cheat leads to Pareto‐superior outcomes regardless of the audit costs (as compared to deterrence). With no cheating, redistribution takes place on first‐ or second‐best frontiers and low‐wage types always end up worse off than high‐wage types. Letting low‐wage types misreport reduces the need to recourse to second‐best mechanisms. Additionally, it increases the reach of first‐best redistribution to outcomes at which low‐wage types are better off than high‐wage types.
{"title":"Welfare improving tax evasion","authors":"Chiara Canta, Helmuth Cremer, Firouz Gahvari","doi":"10.1111/sjoe.12539","DOIUrl":"https://doi.org/10.1111/sjoe.12539","url":null,"abstract":"Abstract We study optimal income taxation in a two‐group framework where the private cost of misreporting income is positively correlated with productivity. If high‐wage types always reveal their income truthfully, then letting low‐wage types cheat leads to Pareto‐superior outcomes regardless of the audit costs (as compared to deterrence). With no cheating, redistribution takes place on first‐ or second‐best frontiers and low‐wage types always end up worse off than high‐wage types. Letting low‐wage types misreport reduces the need to recourse to second‐best mechanisms. Additionally, it increases the reach of first‐best redistribution to outcomes at which low‐wage types are better off than high‐wage types.","PeriodicalId":47929,"journal":{"name":"Scandinavian Journal of Economics","volume":"40 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135768744","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract This paper presents an integrated model of intratemporal demand and intertemporal consumption, with allowance for durable goods and liquidity constraints. Demand equations for nondurable and durable goods, with the user cost of durable goods, and a consumption Euler equation incorporating liquidity constraints, are jointly estimated for Norwegian consumers from 1979 to 2018. Results show that demand analyses ignoring durable goods leads to a significant bias in the elasticities of nondurable goods. Norwegian consumers are found to be impatient, with low risk aversion. There is weak evidence for liquidity constraints in consumption. No strong evidence exists for intertemporal substitution in consumption, but a considerable effect of uncertainty is found in durable consumption. This article is protected by copyright. All rights reserved.
{"title":"Durable goods and consumer behavior with liquidity constraints","authors":"H. Youn Kim, José Alberto Molina, K. K. Gary Wong","doi":"10.1111/sjoe.12546","DOIUrl":"https://doi.org/10.1111/sjoe.12546","url":null,"abstract":"Abstract This paper presents an integrated model of intratemporal demand and intertemporal consumption, with allowance for durable goods and liquidity constraints. Demand equations for nondurable and durable goods, with the user cost of durable goods, and a consumption Euler equation incorporating liquidity constraints, are jointly estimated for Norwegian consumers from 1979 to 2018. Results show that demand analyses ignoring durable goods leads to a significant bias in the elasticities of nondurable goods. Norwegian consumers are found to be impatient, with low risk aversion. There is weak evidence for liquidity constraints in consumption. No strong evidence exists for intertemporal substitution in consumption, but a considerable effect of uncertainty is found in durable consumption. This article is protected by copyright. All rights reserved.","PeriodicalId":47929,"journal":{"name":"Scandinavian Journal of Economics","volume":"59 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135830109","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Camilla Skovbo Christensen, Bastian Emil Ellegaard
Abstract We exploit exogenous variation from a pension reform in Denmark to estimate the effect of tax subsidies on total private saving. We present new evidence on individuals in the middle of the income distribution and show that a reduction in tax subsidies for retirement saving reduces total private saving. The reform changed the tax incentives for saving in the pension scheme that holds the highest tax advantage for middle‐income workers in Denmark. We find that for each unit of reduced saving in this pension scheme, only 64 percent is substituted to other types of saving.
{"title":"Do tax subsidies for retirement saving affect total private saving? New evidence on middle‐income workers<sup>*</sup>","authors":"Camilla Skovbo Christensen, Bastian Emil Ellegaard","doi":"10.1111/sjoe.12540","DOIUrl":"https://doi.org/10.1111/sjoe.12540","url":null,"abstract":"Abstract We exploit exogenous variation from a pension reform in Denmark to estimate the effect of tax subsidies on total private saving. We present new evidence on individuals in the middle of the income distribution and show that a reduction in tax subsidies for retirement saving reduces total private saving. The reform changed the tax incentives for saving in the pension scheme that holds the highest tax advantage for middle‐income workers in Denmark. We find that for each unit of reduced saving in this pension scheme, only 64 percent is substituted to other types of saving.","PeriodicalId":47929,"journal":{"name":"Scandinavian Journal of Economics","volume":"173 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-08-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136244249","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study optimal income taxation in a two‐group framework where the private cost of misreporting income is positively correlated with productivity. If high‐wage types always reveal their income truthfully, letting low‐wage types cheat leads to Pareto‐superior outcomes regardless of the audit costs (as compared to deterrence). With no cheating, redistribution takes place on first‐ or second‐best frontiers and low‐wage types always end up worse off than high‐wage types. Letting low‐wage types misreport obviates the need to recourse to second‐best mechanisms. Additionally, it increases the reach of first‐best redistribution to outcomes at which low‐wage types are better off than high‐wage types.This article is protected by copyright. All rights reserved.
{"title":"Competing with precision: incentives for developing predictive biomarker tests","authors":"Kurt R. Brekke, D. M. Dalen, O. Straume","doi":"10.1111/sjoe.12543","DOIUrl":"https://doi.org/10.1111/sjoe.12543","url":null,"abstract":"We study optimal income taxation in a two‐group framework where the private cost of misreporting income is positively correlated with productivity. If high‐wage types always reveal their income truthfully, letting low‐wage types cheat leads to Pareto‐superior outcomes regardless of the audit costs (as compared to deterrence). With no cheating, redistribution takes place on first‐ or second‐best frontiers and low‐wage types always end up worse off than high‐wage types. Letting low‐wage types misreport obviates the need to recourse to second‐best mechanisms. Additionally, it increases the reach of first‐best redistribution to outcomes at which low‐wage types are better off than high‐wage types.This article is protected by copyright. All rights reserved.","PeriodicalId":47929,"journal":{"name":"Scandinavian Journal of Economics","volume":" ","pages":""},"PeriodicalIF":1.1,"publicationDate":"2023-08-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49526591","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper provides an extension of the classical indivisible labor supply model where a large macro Frisch elasticity is reconciled with a small micro counterpart. Households take as given state‐dependent hours per worker, shaped by a nonlinear mapping from hours worked to labor services and employment frictions, and make intertemporal labor supply decisions. In the standard indivisible labor supply model, aggregate fluctuations are independent of the individual preference parameter that governs the intensive margin elasticity. In my model, however, they are connected through the extensive margin whose elasticity is empirically reasonable and is shaped by the individual preference parameter.This article is protected by copyright. All rights reserved.
{"title":"Frisch elasticities in a model of indivisible labor supply with endogenous workweek length","authors":"Minchul Yum","doi":"10.1111/sjoe.12544","DOIUrl":"https://doi.org/10.1111/sjoe.12544","url":null,"abstract":"This paper provides an extension of the classical indivisible labor supply model where a large macro Frisch elasticity is reconciled with a small micro counterpart. Households take as given state‐dependent hours per worker, shaped by a nonlinear mapping from hours worked to labor services and employment frictions, and make intertemporal labor supply decisions. In the standard indivisible labor supply model, aggregate fluctuations are independent of the individual preference parameter that governs the intensive margin elasticity. In my model, however, they are connected through the extensive margin whose elasticity is empirically reasonable and is shaped by the individual preference parameter.This article is protected by copyright. All rights reserved.","PeriodicalId":47929,"journal":{"name":"Scandinavian Journal of Economics","volume":" ","pages":""},"PeriodicalIF":1.1,"publicationDate":"2023-08-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46995780","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study a labor market in which two identical firms compete over a pool of homogenous workers. Firms pre‐commit to their outreach to potential employees, either through their informative advertising choices, or through their screening processes, before engaging in a wage competition ('a la Bertrand). Although firms are homogeneous, the unique pure‐strategy equilibrium is asymmetric: one firm maximizes its outreach whereas the other compromises on a significantly smaller market share. The features of the asymmetric equilibrium extend to a general oligopsony with any finite number of firms.This article is protected by copyright. All rights reserved.
我们研究了一个劳动力市场，在这个市场中，两个完全相同的公司争夺同质工人。公司在参与工资竞争之前，通过信息丰富的广告选择或筛选过程，预先承诺与潜在员工进行接触（’a la Bertrand）。尽管企业是同质的，但独特的纯战略平衡是不对称的：一家企业最大限度地扩大其影响力，而另一家则在明显较小的市场份额上妥协。非对称均衡的特征扩展到任何有限数量的企业的一般寡头垄断。这篇文章受版权保护。保留所有权利。
{"title":"Asymmetric market power and wage suppression","authors":"Tomer Blumkin, David Lagziel","doi":"10.1111/sjoe.12545","DOIUrl":"https://doi.org/10.1111/sjoe.12545","url":null,"abstract":"We study a labor market in which two identical firms compete over a pool of homogenous workers. Firms pre‐commit to their outreach to potential employees, either through their informative advertising choices, or through their screening processes, before engaging in a wage competition ('a la Bertrand). Although firms are homogeneous, the unique pure‐strategy equilibrium is asymmetric: one firm maximizes its outreach whereas the other compromises on a significantly smaller market share. The features of the asymmetric equilibrium extend to a general oligopsony with any finite number of firms.This article is protected by copyright. All rights reserved.","PeriodicalId":47929,"journal":{"name":"Scandinavian Journal of Economics","volume":" ","pages":""},"PeriodicalIF":1.1,"publicationDate":"2023-08-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47652040","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study investigates the impact of incidental happiness associated with the outcome of the Dutch national soccer championship on charitable giving shortly after the decisive match. We use survey data in which participants were asked to make an anonymous donation of an earned endowment. For estimating the causal effect of happiness on charitable giving, we exploit the variation in the emotions of fans between and within teams using two complementary empirical approaches. The first approach is based on the preference of fans for local teams. We find that individuals living closer to the city of the new champion (Amsterdam) are happier and also more likely to donate to charity than individuals living further away. Importantly, distance to Amsterdam does not impact charitable giving in a placebo sample of individuals with no interest in soccer. The second approach exploits variation between different types of fans within teams. Allegiant fans, individuals who attended a match, are happier and more likely to donate to charity than ‘stay‐home’ fans when their team wins the title. Allegiant fans are less happy and less likely to donate than ‘stay‐home’ fans when their team does not win the title. Instrumental variable estimates suggest a large effect of incidental happiness on charitable giving.This article is protected by copyright. All rights reserved.
{"title":"Altruistic behavior and soccer: the effect of incidental happiness on charitable giving","authors":"Frank Hubers, D. Webbink","doi":"10.1111/sjoe.12541","DOIUrl":"https://doi.org/10.1111/sjoe.12541","url":null,"abstract":"This study investigates the impact of incidental happiness associated with the outcome of the Dutch national soccer championship on charitable giving shortly after the decisive match. We use survey data in which participants were asked to make an anonymous donation of an earned endowment. For estimating the causal effect of happiness on charitable giving, we exploit the variation in the emotions of fans between and within teams using two complementary empirical approaches. The first approach is based on the preference of fans for local teams. We find that individuals living closer to the city of the new champion (Amsterdam) are happier and also more likely to donate to charity than individuals living further away. Importantly, distance to Amsterdam does not impact charitable giving in a placebo sample of individuals with no interest in soccer. The second approach exploits variation between different types of fans within teams. Allegiant fans, individuals who attended a match, are happier and more likely to donate to charity than ‘stay‐home’ fans when their team wins the title. Allegiant fans are less happy and less likely to donate than ‘stay‐home’ fans when their team does not win the title. Instrumental variable estimates suggest a large effect of incidental happiness on charitable giving.This article is protected by copyright. All rights reserved.","PeriodicalId":47929,"journal":{"name":"Scandinavian Journal of Economics","volume":" ","pages":""},"PeriodicalIF":1.1,"publicationDate":"2023-08-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44713641","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract We propose the use of machine learning methods to estimate inequality of opportunity and to illustrate that regression trees and forests represent a substantial improvement over existing approaches: they reduce the risk of ad hoc model selection and trade off upward and downward bias in inequality of opportunity estimates. The advantages of regression trees and forests are illustrated by an empirical application for a cross‐section of 31 European countries. We show that arbitrary model selection might lead to significant biases in inequality of opportunity estimates relative to our preferred method. These biases are reflected in both point estimates and country rankings.
{"title":"The roots of inequality: estimating inequality of opportunity from regression trees and forests<sup>*</sup>","authors":"Paolo Brunori, Paul Hufe, Daniel Mahler","doi":"10.1111/sjoe.12530","DOIUrl":"https://doi.org/10.1111/sjoe.12530","url":null,"abstract":"Abstract We propose the use of machine learning methods to estimate inequality of opportunity and to illustrate that regression trees and forests represent a substantial improvement over existing approaches: they reduce the risk of ad hoc model selection and trade off upward and downward bias in inequality of opportunity estimates. The advantages of regression trees and forests are illustrated by an empirical application for a cross‐section of 31 European countries. We show that arbitrary model selection might lead to significant biases in inequality of opportunity estimates relative to our preferred method. These biases are reflected in both point estimates and country rankings.","PeriodicalId":47929,"journal":{"name":"Scandinavian Journal of Economics","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-08-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135165003","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract To control sequential public bad productions under imperfect monitoring, this paper proposes a penalty lottery: a violator passes the responsibility of the fine to the next potential violator with some probability and pays all the accumulated fines with the complementary probability. The penalty lottery does not merely impose extreme fines because an absorbing state is practically unreachable. It self‐selects people more willing to produce public bads and endogenously imposes the larger expected fines on them. It has advantages over the day‐fine system in which the fine depends on the offender's daily income. Experimental evidence is consistent with the proposed theoretical predictions.
{"title":"Penalty lottery*","authors":"Duk Gyoo Kim","doi":"10.1111/sjoe.12528","DOIUrl":"https://doi.org/10.1111/sjoe.12528","url":null,"abstract":"Abstract To control sequential public bad productions under imperfect monitoring, this paper proposes a penalty lottery: a violator passes the responsibility of the fine to the next potential violator with some probability and pays all the accumulated fines with the complementary probability. The penalty lottery does not merely impose extreme fines because an absorbing state is practically unreachable. It self‐selects people more willing to produce public bads and endogenously imposes the larger expected fines on them. It has advantages over the day‐fine system in which the fine depends on the offender's daily income. Experimental evidence is consistent with the proposed theoretical predictions.","PeriodicalId":47929,"journal":{"name":"Scandinavian Journal of Economics","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-08-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135840487","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"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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