Journal of Economic Inequality最新文献

The aim of this study is to analyze the effect of fiscal policy by race, disaggregating to consider Uruguayans with primarily European, African and indigenous ancestry. We perform an incidence analysis, an estimation of the effect of fiscal policy on the poverty exit rate and an assessment of the impact on the average ethno-racial gaps. The findings support the idea that fiscal policy reduces (but does not eliminate) ethnic gaps. This result is led by health care and educational transfers, and to a lesser degree by direct transfers. We do not consider quality issues with public services, which may affect the estimated narrowing of gaps. Finally, we find that Afro-descendants and indigenous individuals do not capture the full potential of education transfers because of their high drop-out rate.

Numerous studies have estimated a high intergenerational correlation in economic status. Such studies do not typically attend to potential biases that may arise due to survey attrition. Using the Panel Study of Income Dynamics - the data source most commonly used in prior studies - we demonstrate that attrition is particularly high for low-income adult children with low-income parents and particularly low for high-income adult children with high-income parents. Because of this pattern of attrition, intergenerational upward mobility has been overstated for low-income families and downward mobility has been understated for high-income families. The bias among low-income families is greater than the bias among high-income families implying that intergenerational elasticity in family income is higher than previous estimates with the Panel Study of Income Dynamics would suggest.

Previous studies find that some social groups are stuck in poverty traps because of network effects. However, these studies do not carefully analyze how these groups overcome low human capital investment activities. Unlike previous studies, the model in this paper includes network externalities in both the human capital investment stage and the subsequent career stages. This implies that not only the current network quality, but also the expectations about future network quality affect the current investment decision. Consequently, the coordinated expectation among the group members can play a crucial role in the determination of the final state. We define "overlap" for some initial skill ranges, whereby the economic performance of a group can be improved simply by increasing expectations of a brighter future. We also define "poverty trap" for some ranges, wherein a disadvantaged group is constrained by its history, and we explore the egalitarian policies to mobilize the group out of the trap.

We examine the increasing variance of earnings of white men over the 1970s and 1980s by focusing on changes in the covariance structure of earnings. Using data from the Michigan PSID from 1969-1987, we find that about half of the increase has arisen from an increase in the variance of the permanent component of earnings and half from an increase in the variance of the transitory component, where the transitory component is composed of serially correlated shocks that die out within three years. We thus find that increases in the variability of earnings are of equal importance to increases in the dispersion of permanent earnings in explaining recent increases in earnings inequality.