Fiscal Studies最新文献

Economics has traditionally understood ‘welfare’ (what makes a life go well) as the satisfaction of preference. This conceptualisation of welfare is typically measured using revealed preferences, proxied through income and prices or stated in willingness-to-pay surveys. Recent decades have seen growing challenges to this paradigm. The climate crisis, among other phenomena, has called into question whether income and price data effectively proxy preferences, and willingness-to-pay surveys continue to struggle with accurately pricing important items such as biodiversity, digital goods, privacy and social connections. Preference satisfaction as a welfare criterion has also been challenged conceptually by psychologists and scholars working in the development space, among others. In this article, we review recent innovations in alternate ways of conceptualising and measuring welfare for the purposes of economic welfare analysis. We focus on using stated preferences over aspects of well-being, life-satisfaction scales and the WELLBY approach, and well-being frameworks such as Bhutan's Gross National Happiness Index. While not without weaknesses, these approaches also have marked strengths relative to the traditional approach.

Economics is permeated with value judgements, and removing them would be neither possible nor desirable. They are consequential, in the sense that they have a sizeable impact on economists’ output. Yet many economists may not even realise they are there. This paper surveys ways in which values influence economic theory and practice and explores some implications for the manner in which economics – especially welfare economics – is taught, practised and communicated. Explicit attention to values needs to be embedded in the teaching of economics at all levels.

This paper highlights the important impact of charitable giving and warm glow on the identification of the marginal cost of public funds (MCF). We employ the warm glow model of charitable giving to describe taxpayer behaviour, whereas we employ the standard model to evaluate social welfare. We first identify the impact theoretically. Then we conduct simulations to quantify its size numerically. The results of our numerical simulations show that the standard model underestimates the magnitude of MCF by at least 10 per cent. Our work suggests that adopting a non-welfarist social welfare function can make a significant difference to the identification of MCF.

Benchmark replacement rates are a key parameter for retirement plans. Often, a pension level of around 70 per cent of net income during working life is considered as an adequate choice. However, this heuristic value is left unjustified, and data-based benchmarks are limited. In this paper, we propose to estimate a pension-level benchmark based on keeping the living standard achieved during working life constant after retirement. Applying parametric, semi-parametric and non-parametric estimation methods to data from the United States and Germany, we find that a net pension income of around 100 per cent of the last net working-life income, plus or minus 10 percentage points, is required to keep the living standard constant. However, we also find that the outcome of the exercise can depend on how ‘living standards’ are measured.

Banks, J., Cattan, S., Kraftman, L. and Krutikova, S. (2021), Mortality inequality in England over the past 20 years. Fiscal Studies, 42, 47–77. https://doi.org/10.1111/1475-5890.12266

In the above article, the legend on Figure 7 needs to be changed to the following:

• Deaths of despair, Neoplasms, Disease of the respiratory system

• Diabetes, Ischaemic heart disease, Stroke (cerebrovascular)

• Other circulatory, Unintentional injuries, All other

We apologise for this error.

The updated figure is as follows:

We study earnings and income inequality in Britain over the 25 years prior to the COVID-19 pandemic. We focus on the middle 90 per cent of the income distribution, within which the gap between top and bottom in 2019–20 was essentially the same, after taxes and transfers, as a quarter-century earlier. This has led to a narrative of ‘stable inequality’, which we argue misses important nuances and key lessons from the UK's experience. In particular, there have been periods in which household earnings inequalities were changing considerably but tax and transfer policy was offsetting its effects on income inequality – in different directions at different times, reflecting sharp changes of policy approach. Means-tested transfers played a crucial role in containing inequality during the ‘inclusive growth’ period of the 1990s and early 2000s, as well as the Great Recession. During the 2010s, the minimum wage emerged as the government's primary policy tool for boosting incomes, but this happened almost simultaneously with cutbacks to means-tested transfers, meaning that household earnings inequalities fell considerably and yet net income inequality rose.

This short paper presents an overview of the French policy mix towards labour market inequalities, consisting of a high minimum wage together with targeted payroll tax cuts around the minimum wage. It reviews the recent literature documenting the impact of that policy mix on employment and wage inequality. The main takeaways are that pre-tax wage inequality has been increasing in France rather like it has in the UK and the US, while net wage inequality has decreased and then remained stable. The employment experience for the middle age group is also very close in France to the one in the UK and the US, while it differs markedly at young and older ages. The paper offers two more general thoughts on how to make progress in comparing policy options. First, most studies tend to give too much weight to tax and benefit reforms in being able to reduce inequality as they disregard incidence mechanisms, and fail to incorporate properly longer-term effects of other policies on pre-tax inequality. Second, the design of effective policy should always incorporate simplicity and salience. Failure to do so is likely to lead to little expected impact of such policies.

The distinction between positive economics – describing economic programmes, situations and conditions as they exist – and normative economics – prescribing policies – has a long history. It is an especially important distinction in public economics, which by its nature concerns the actions of government. In this essay, I consider how two relatively recent developments in tax economics alter, blur or at least complicate the classic distinctions between positive and normative economics. The two developments I address are the insights generated by the study of behavioural economics and increased attention to tax evasion and tax enforcement. I organise my thoughts by addressing how three sets of actors central to public finance actually behave and should behave – taxpayers, governments and tax economists. I argue that tax economics should take seriously the substantial presence of behavioural anomalies and tax evasion, and that it has already begun to do so. I suggest some directions this effort might profitably take.

Andrew, A., Cattan, S., Costa Dias, M., Farquharson, C., Kraftman, L., Krutikova, S., Phimister, A. & Sevilla, A. (2022), The gendered division of paid and domestic work under lockdown. Fiscal Studies, 43, 325–340. https://doi.org/10.1111/1475-5890.12312

In the above article, the following sentence needs to be inserted in the acknowledgement section: ‘Monica Costa Dias is grateful to the Economic and Social Research Council (ESRC) for funding her time through project ES/W01159X/1.’ The author apologises for this error. The updated acknowledgement section should read as follows: