ERN: EquityPub Date : 2020-09-14DOI: 10.2139/ssrn.3693142
E. Posner
{"title":"The Boundaries of Normative Law and Economics","authors":"E. Posner","doi":"10.2139/ssrn.3693142","DOIUrl":"https://doi.org/10.2139/ssrn.3693142","url":null,"abstract":"Normative law and economics remains controversial decades after its emergence despite its successes in legal scholarship and its similarity to influential approaches in economics. The reason is that many of its proponents have exaggerated its value for policy while discounting other methods, tainting the enterprise. Normative law and economics as a method of policy analysis properly operates within narrow boundaries defined by its four main premises: (1) welfarism based on unrestricted preferences; (2) unimportance of distributional effects; (3) unimportance of impacts on non-welfare values; and (4) rational instrumental behavior of affected persons. Scholars have made progress in normative law and economics by abstracting away from these premises. The most successful work proposes “modular” insights at a middle level of abstraction. But this work can be properly put to use only if the excluded factors are reintroduced into analysis prior to application.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"53 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-09-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115878617","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}
ERN: EquityPub Date : 2020-08-30DOI: 10.2139/ssrn.3683462
A. Zamnius, N. Nikitina
{"title":"Inequality During The Fourth Industrial Revolution","authors":"A. Zamnius, N. Nikitina","doi":"10.2139/ssrn.3683462","DOIUrl":"https://doi.org/10.2139/ssrn.3683462","url":null,"abstract":"Current trends in technological progress have a comprehensive impact on each individual and on society as a whole. More- over, this impact is more pronounced than ever, since innovation is spreading much faster and larger than in previous technological revolutions, so global consequences can be absolutely unpredictable. That is why it is important to think about the possible future that awaits us and its consequences.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"44 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-08-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127617002","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}
ERN: EquityPub Date : 2020-08-20DOI: 10.2139/ssrn.3678031
H. W. Zaunbrecher, Nickolas Gagnon
{"title":"Declining Wages Increase Selfish Redistribution in an Environment with Fixed Income Inequality","authors":"H. W. Zaunbrecher, Nickolas Gagnon","doi":"10.2139/ssrn.3678031","DOIUrl":"https://doi.org/10.2139/ssrn.3678031","url":null,"abstract":"We use a highly-controlled laboratory experiment to study the causal impact of income decreases on redistribution decisions, in an environment where the income inequality that may be created with wage changes is kept fixed. First, we investigate the role of a decreasing wage compared to one’s past wage (intra-personal decrease). Second, we investigate the role of a wage that decreases relative to the wage of another person (inter-personal decrease). If intra-personal or inter-personal decreases create dissatisfaction for an individual, that person may support redistribution policies that compensate him or her for the situation or rectify it. Overall, we find evidence that individuals indeed behave more selfishly when they experience decreasing wages. While many studies examine the effect of income inequality on redistribution decisions, this is the first to isolate the effect of income changes.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"141 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-08-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116552989","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}
ERN: EquityPub Date : 2020-06-14DOI: 10.2139/ssrn.3278425
E. Capatina, M. Keane, Shiko Maruyama
{"title":"Health Shocks and the Evolution of Earnings over the Life-Cycle","authors":"E. Capatina, M. Keane, Shiko Maruyama","doi":"10.2139/ssrn.3278425","DOIUrl":"https://doi.org/10.2139/ssrn.3278425","url":null,"abstract":"We study the contribution of health shocks to earnings inequality and uncertainty in labor market outcomes. We calibrate a life-cycle model with idiosyncratic health, earnings, employment and survival risk, where individuals make labor supply and savings decisions, adding two novel features. First, we model health as a complex multidimensional concept. We differentiate between functional health and latent health risk, and between temporary/persistent and predictable/unpredictable health shocks. Second, we model interactions between health and human capital accumulation. We find that, in an environment with both costly health shocks and means-tested transfers, low-skill workers find it optimal to reduce their labor supply in order to maintain eligibility for transfers that protect them from potentially high health care costs. Thus, means-tested transfers generate a moral hazard effect that causes agents (especially those with low productivity) to invest less in human capital. Provision of public insurance can alleviate this problem and enhance labor supply.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"- - 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132721919","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}
ERN: EquityPub Date : 2020-05-01DOI: 10.2139/ssrn.3594465
S. Kominers, Parag A. Pathak, T. Sonmez, M. Utku Ünver
{"title":"Paying It Backward and Forward: Expanding Access to Convalescent Plasma Therapy Through Market Design","authors":"S. Kominers, Parag A. Pathak, T. Sonmez, M. Utku Ünver","doi":"10.2139/ssrn.3594465","DOIUrl":"https://doi.org/10.2139/ssrn.3594465","url":null,"abstract":"COVID-19 convalescent plasma (CCP) therapy is currently a leading treatment for COVID-19. At present, there is a shortage of CCP relative to demand. We develop and analyze a model of centralized CCP allocation that incorporates both donation and distribution. In order to increase CCP supply, we introduce a mechanism that utilizes two incentive schemes, respectively based on principles of “paying it backward” and “paying it forward.” Under the first scheme, CCP donors obtain treatment vouchers that can be transferred to patients of their choosing. Under the latter scheme, patients obtain priority for CCP therapy in exchange for a future pledge to donate CCP if possible. We show that in steady-state, both principles generally increase overall treatment rates for all patients—not just those who are voucher-prioritized or pledged to donate. Our results also hold under certain conditions if a fraction of CCP is reserved for patients who participate in clinical trials. Finally, we examine the implications of pooling blood types on the efficiency and equity of CCP distribution.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"63 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114963058","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}
ERN: EquityPub Date : 2020-04-14DOI: 10.2139/ssrn.3575624
Toni Juuti
{"title":"Inequality and Economic Growth: A Method-Dependent Relationship Driven by the Measure of Income Inequality?","authors":"Toni Juuti","doi":"10.2139/ssrn.3575624","DOIUrl":"https://doi.org/10.2139/ssrn.3575624","url":null,"abstract":"This study re-examines the much studied inequality-growth relationship. An empirical analysis that covers over a hundred countries finds no clear evidence for inequality to boost or dampen the growth of per capita GDP. Furthermore, evidence is found for inequality to promote growth through physical investments and hurt economic development via lower accumulation of human capital. These two mechanisms seem to balance out one another. The conclusions are based on a thorough investigation using the World Income Inequality Database maintained by UNU-WIDER and considering different measures of inequality, various estimation techniques, different specifications of the growth regression, allowing for non-linearities in the relationship and separating the OECD members from the non-OECD countries. The properties of the much-used system GMM estimator are investigated in detail. Even though its use is motivated by disentangling causality from correlation, the technique is found to suffer from weak instrument variables and sensitivity to small changes in the econometric specification. The results from simpler panel techniques follow a predictable pattern, where the use of cross-country (time) variation is associated with negative (positive) estimates. More profoundly, a strong result stemming from a data set that combines information from several countries would be of limited use for policy purposes because the actions to curb or promote income inequality are controlled by national policy-makers.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"59 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-04-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130344639","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}
ERN: EquityPub Date : 2020-03-18DOI: 10.2139/ssrn.3556877
Lawrence McKay
{"title":"Political Discontent Across English Regions: The Role of Economic Grievances in the North South Divide","authors":"Lawrence McKay","doi":"10.2139/ssrn.3556877","DOIUrl":"https://doi.org/10.2139/ssrn.3556877","url":null,"abstract":"Most nations exhibit regional inequality and the developing wisdom among ‘elites’ is that ‘peripheral’, ‘left-behind’ regions are more dissatisfied with politics: however, the ways that regional inequality can affect discontent are theoretically underspecified and hardly tested empirically. In the context of the UK, I explore three mechanisms. First, I consider location in the core-periphery; second, perceptions about the economic performance of one’s own region, third, feelings that one’s region is in ‘relative deprivation’ in relation to the capital, London. I confirm that Northern, ‘peripheral’ regions are more dissatisfied than the ‘core’, London. Second, the more negative people are about their own region’s economy, the more likely they are to express discontent, helping to explain the greater discontent people report in the ‘peripheral’ North of England specifically. Third, I find that ‘relative deprivation’ is associated with increased discontent. This effect is strongest for people who have a sense of belonging to their region, and is consistent with a ‘group justification’ argument whereby people who feel ‘left behind’ displace this onto political actors to ‘justify’ their group’s situation. These results are, in theory, generalisable, but particularly shine light on the political challenge of reducing discontent through investing in struggling regions in the UK.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117003492","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}
ERN: EquityPub Date : 2019-12-01DOI: 10.2139/ssrn.3206823
Ehsan Azarmsa
{"title":"Investment Sophistication and Wealth Inequality","authors":"Ehsan Azarmsa","doi":"10.2139/ssrn.3206823","DOIUrl":"https://doi.org/10.2139/ssrn.3206823","url":null,"abstract":"I examine how differences in the ability to identify profitable investment opportunities contribute to wealth inequality. I analyze a model of financial markets with investors heterogeneously informed about future returns. The unconditional wealth share distribution features a thick right-tail populated by the best-informed investors. Wealth inequality increases with the cost of information acquisition and market liquidity. It is non-monotone in the precision of public information and the size of investments delegated to the best-informed investors. I provide bounds for the speed of wealth dynamics. Using data on US households' beliefs, the model can explain the recent dynamics in wealth inequality.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"117 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116624664","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}
ERN: EquityPub Date : 2019-11-15DOI: 10.2139/ssrn.3488010
H. Khan, C. T. Shehzad, A. Burki
{"title":"Finance and Income inequality retraced","authors":"H. Khan, C. T. Shehzad, A. Burki","doi":"10.2139/ssrn.3488010","DOIUrl":"https://doi.org/10.2139/ssrn.3488010","url":null,"abstract":"We show the translation of income inequality into wealth inequality, arguably via the channel of corporate financing. For 15,812 publicly listed firms operating in 41 developed and developing countries, we find robust empirical evidence of a positive impact of national income inequality on corporate wealth concentration via firm ownership concentration. This is also a contribution, through a new explanatory factor identification, to the literature on firm ownership concentration.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115398751","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}
ERN: EquityPub Date : 2019-11-11DOI: 10.2139/ssrn.3494245
F. Tadei, G. Alfani
{"title":"Income Inequality in French West Africa: Building Social Tables for Pre-Independence Senegal and Ivory Coast","authors":"F. Tadei, G. Alfani","doi":"10.2139/ssrn.3494245","DOIUrl":"https://doi.org/10.2139/ssrn.3494245","url":null,"abstract":"Sub-Saharan Africa is home today to some of the most unequal countries in the world, in Southern and Central Africa, as well as others that are close to the world average, in Western Africa. Yet, there is no consensus regarding the historical factors that led to such a situation. Given limited data on income distribution during colonial times, we do not know whether present-day inequality patterns can be traced back to the colonial period and which role was played by colonial institutions. Most of our knowledge comes from information on British colonies, while territories subjected to other colonial powers are much less well known. To address this gap, we analyze trends in income inequality for colonies in French West Africa, building social tables for Senegal and Ivory Coast during the last decades of colonial rule. We find that income inequality was high during the colonial period, because of the huge income differential between Africans and European settlers (especially in Senegal) and of high inequality within the African population (especially in the Ivory Coast). Nevertheless, it tended to reduce during colonial rule – but the trend inverted after independence. Our findings cast in a new light the connection between colonialism, extractive institutions, high inequality and inequality extraction ratios.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115371049","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}