ERN: EquityPub Date : 2016-04-08DOI: 10.2139/ssrn.2760802
Vincenzo Merella, Daniel Santabárbara
{"title":"Do the Rich (Really) Consume Higher-Quality Goods? Evidence from International Trade Data","authors":"Vincenzo Merella, Daniel Santabárbara","doi":"10.2139/ssrn.2760802","DOIUrl":"https://doi.org/10.2139/ssrn.2760802","url":null,"abstract":"Using average import prices (unit values) as proxies for quality, a large body of the international trade literature finds both theoretical and empirical support for the positive relationship between importer income and quality of imports. Several authors, however, argue that the empirical evidence of the link between income and product quality might be spurious, since import prices could be affected by other factors than product quality. This paper takes into account this issue with a new theoretical and empirical approach. Building on Khandelwal’s (2010) discrete choice model approach, where quality is inferred by quantitative market shares as well as unit values, we develop a model that allows for willingness to pay for quality to vary with income. We empirically validate the theoretical relationship between importer income and product quality by using the Eurostat’s COMEXT database, which collects customs data reported by EU countries at 8-digit disaggregation. Our estimations support the positive link between consumer income and product quality, which is also robust across sectors.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-04-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114507985","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 : 2016-04-01DOI: 10.3386/W22170
Luojia Hu, R. Kaestner, B. Mazumder, Sarah Miller, Ashley Wong
{"title":"The Effect of the Patient Protection and Affordable Care Act Medicaid Expansions on Financial Wellbeing","authors":"Luojia Hu, R. Kaestner, B. Mazumder, Sarah Miller, Ashley Wong","doi":"10.3386/W22170","DOIUrl":"https://doi.org/10.3386/W22170","url":null,"abstract":"We examine the effect of the Medicaid expansions under the 2010 Patient Protection and Affordable Care Act (ACA) on consumer, financial outcomes using data from a major credit reporting agency for a large, national sample of adults. We employ the synthetic control method to compare individuals living in states that expanded Medicaid to those that did not. We find that the Medicaid expansions significantly reduced the number of unpaid bills and the amount of debt sent to third-party collection agencies among those residing in zip codes with the highest share of low-income, uninsured individuals. Our estimates imply a reduction in collection balances of between $600 to $1,000 among those who gain Medicaid coverage due to the ACA. Our findings suggest that the ACA Medicaid expansions had important financial impacts beyond health care use.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124696410","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 : 2016-03-10DOI: 10.2139/ssrn.2749002
E. Avraamova, Marina A. Eliseeva, Dmitriy Loginov, Svetlana Mareeva
{"title":"Новые Факторы Социально-Экономического Неравенства: Причины Возникновения и Пути Их Преодоления (New Factors of Socio-Economic Inequality: Causes and Ways to Overcome Them)","authors":"E. Avraamova, Marina A. Eliseeva, Dmitriy Loginov, Svetlana Mareeva","doi":"10.2139/ssrn.2749002","DOIUrl":"https://doi.org/10.2139/ssrn.2749002","url":null,"abstract":"Russian Abstract: Сокращение избыточного социально-экономического неравенства различных слоев российского населения возможно не только за счет реализации компенсаторных функций социальной политики, но и за счет ее стимулирующих функций – активизации ресурсных возможностей самого населения. Актуальность такого подхода к проблеме сокращения неравенства повышается в период экономической нестабильности. Целью исследования было выяснение того, какими ресурсными возможностями обладает население для того, чтобы сохранить уровень благосостояния в этот период.Предпринятый анализ проводился в двух измерениях – на уровне индивидов и на уровне домохозяйств, чему способствовала соответствующая организация массового выборочного опроса, репрезентативно представляющего население России в целом.Подробно рассмотрены модели социально-экономического поведения индивидов и домохозяйств, направленные на повышение или удержание достигнутого уровня благосостояния.English Abstract: Reduction of the excessive socio-economic inequality of various layers of the Russian population is possible not only through the implementation of social policy compensatory functions but also due to its stimulating functions – population resource capabilities enhancement. The relevance of such approach to the problem of inequality reduction increases in periods of economic instability. The purpose of the research was to find out what resource capabilities the population obtained to maintain the level of welfare in this period.The analysis was conducted in two dimensions – at the level of individuals and at the level of households that was contributed by specially arranged sample survey representing whole Russian population.The models of socio-economic behavior of individuals and households directed at increasing or retaining the gained level of welfare are reviewed in details.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"207 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-03-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121026421","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 : 2016-02-25DOI: 10.2139/ssrn.2524616
T. Islam
{"title":"Investigating the Impact of Historical Factors on the Present Level of Income Inequality in the United States","authors":"T. Islam","doi":"10.2139/ssrn.2524616","DOIUrl":"https://doi.org/10.2139/ssrn.2524616","url":null,"abstract":"Recently, income inequality has been rising in many parts of the world. This is creating some serious concerns among policymakers, as higher levels of income inequality can lead to various social ills. However, little is known about the role of historical factors in explaining the current level of inequality. I use the model of Durlauf (1996) as reference to create an econometric model to estimate this impact. I use current and historical data of US states to study the effect of different socio-economic factors on inequality. Using two measures of income inequality, one that places equal weight on all individuals, and one that places a higher weight on the richer group, I find that illiteracy rate in 1920 and bank deposits in 1920 have a strong positive influence on current level of inequality. Higher levels of farmland inequality in 1920 also increase current incomes of the richer segment among the rich. Higher illiteracy indicates a lower level of human capital, and that can affect income distribution. Higher levels of bank deposits and farmland inequality in the past indicate a higher inequality of wealth in the past. Through the intergenerational transmission of income and wealth, income distribution can be more skewed in the future, leading to higher levels of inequality.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"119 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122095528","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 : 2016-02-16DOI: 10.2139/ssrn.2732048
Kyubin Yim, G. Oh
{"title":"Technological Innovation, Inequality, and Financial Instability","authors":"Kyubin Yim, G. Oh","doi":"10.2139/ssrn.2732048","DOIUrl":"https://doi.org/10.2139/ssrn.2732048","url":null,"abstract":"Future crisis will be different from previous crises due to the fast speed of technological innovation. In particular, after the subprime crisis and the Piketty Panic, we need a new macroeconomic framework based on three ingredients, namely, fast and dramatic technological innovation, financial instability, and inequality. In this paper, we suggest an agent-based macroeconomic model based on these three components. Our model consists of firms with two sectors, such as downstream (D) and upstream (U) firms and banks. We consider the technological innovation as saving labor in D firms in addition to establishing credit relationships between firms and banks. We find several results that have rich economic implications: (i) Business-cycle fluctuation and inequality are generated by an interconnection between agents; (ii) Technological innovation can amplify business-cycle fluctuation and economic instability; (iii) A high concentration of advanced technology amplifies economic instability and inequality; and (iv) Monetary interest rate policies from the central bank can reduce inequality in sectors where there are technology gaps between firms, but these policies weaken economic stability.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"49 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127203227","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 : 2016-02-01DOI: 10.3386/W22032
Alan J. Auerbach, L. Kotlikoff, Darryl Koehler
{"title":"U.S. Inequality and Fiscal Progressivity: An Intragenerational Accounting","authors":"Alan J. Auerbach, L. Kotlikoff, Darryl Koehler","doi":"10.3386/W22032","DOIUrl":"https://doi.org/10.3386/W22032","url":null,"abstract":"This study combines the 2013 Federal Reserve Survey of Consumer Finances data and the Fiscal Analyzer, a highly detailed life-cycle consumption-smoothing program, to a) measure ultimate economic inequality – inequality in lifetime spending power – within cohorts, b) assess fiscal progressivity within cohorts, c) calculate marginal remaining lifetime net tax rates, taking into account all major federal and state tax and transfer policies, d) evaluate the ability of current income to correctly classify households as rich, middle class, and poor, e) determine whether current-year average net tax rates accurately capture actual fiscal progressivity, and f) determine whether current-year marginal tax rates on labor supply accurately capture actual remaining lifetime marginal net tax rates. We find far less inequality in spending power than in wealth or labor earnings due to the fiscal system’s high degree of progressivity. But U.S. fiscal redistribution generally comes at a price of very high work disincentives for households regardless of age and resource class. There is, however, very substantial dispersion in marginal net tax rates, which seems hard to reconcile with standard norms of optimal taxation. We also find that current income is a very poor proxy for remaining lifetime resources and that current-year net tax rates can provide a highly distorted picture of true fiscal progressivity and work disincentives.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"89 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121251265","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 : 2016-02-01DOI: 10.2139/SSRN.2732906
R. Burkhauser, N. Hérault, S. Jenkins, Roger Wilkins
{"title":"What Has Been Happening to UK Income Inequality Since the Mid-1990s? Answers from Reconciled and Combined Household Survey and Tax Return Data","authors":"R. Burkhauser, N. Hérault, S. Jenkins, Roger Wilkins","doi":"10.2139/SSRN.2732906","DOIUrl":"https://doi.org/10.2139/SSRN.2732906","url":null,"abstract":"Estimates of UK income inequality trends differ substantially according to whether estimates are based on household survey data (used for official statistics) or tax return data (used in the top incomes literature). We reconcile differences in variable definitions and combine survey and tax return data in order to take advantage of the much better coverage of top incomes in the latter, and provide improved estimates of UK inequality trends since the mid-1990s. We show there was a marked increase in income inequality in the early 2000s that survey-based estimates do not reveal, and our conclusions are robust to changes in the definitions of income, income-sharing unit, and summary inequality measure. In addition, our reconciled and combined data provide more comparable estimates of UK-US inequality trends than the top incomes literature to date.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127006035","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 : 2015-11-27DOI: 10.2139/ssrn.2696269
Luigi Pisano, Andréa Stella
{"title":"Price Heterogeneity and Consumption Inequality","authors":"Luigi Pisano, Andréa Stella","doi":"10.2139/ssrn.2696269","DOIUrl":"https://doi.org/10.2139/ssrn.2696269","url":null,"abstract":"Using the Nielsen Consumer Panel, we document the presence of significant price heterogeneity in the United States. Poor households pay lower prices for the same products, mostly because they shop more at discount stores. However, we also find that price heterogeneity has a very small impact on the measurement of consumption inequality. Adjusting nominal household expenditures by imposing that all products have the same price does not appreciably reduce consumption inequality in the United States. Finally, we decompose our inequality measure into two factors, measuring differences in the composition and size of consumption baskets. Variations in composition and quantity are both very important in explaining consumption inequality, and the two factors appear to be highly correlated.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127645363","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 : 2015-11-06DOI: 10.2139/ssrn.2687341
Jingjing Huo
{"title":"Social Democracy and the Labor Share of National Income in Affluent Capitalist Democracies","authors":"Jingjing Huo","doi":"10.2139/ssrn.2687341","DOIUrl":"https://doi.org/10.2139/ssrn.2687341","url":null,"abstract":"Complementing the existing literature that focuses mostly on the personal distribution of income, this paper studies how social democratic governments affect the factor distribution of national income between capital and labor, in the corporate sector. Drawing from the literature on partisanship and macroeconomic performance, I show that, conditional on strong corporatism, left governments increase the capital/labor input ratio in the corporate sector. I connect this finding to the literature on the labor share, which suggests that a higher capital/labor ratio reduces the labor share when labor is low-skilled but increases the labor share when labor is high-skilled. Drawing from data across 15-18 OECD countries (1985-2005), I show that left governments tilt the division of income in favor of labor when labor is high-skilled, but in favor of capital when labor is low-skilled. Furthermore, left partisanship influences the labor/capital division of income only when corporatist institutions are strong.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-11-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125146768","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 : 2015-11-01DOI: 10.3386/w21730
Mariacristina De Nardi, Giulio Fella, Fang Yang
{"title":"Piketty's Book and Macro Models of Wealth Inequality","authors":"Mariacristina De Nardi, Giulio Fella, Fang Yang","doi":"10.3386/w21730","DOIUrl":"https://doi.org/10.3386/w21730","url":null,"abstract":"Piketty's book, Capital in the Twenty-First Century, discusses several factors affecting wealth inequality: rates of return on capital, output growth rates, tax progressivity, top income shares, and heterogeneity in saving rates and inheritances. This paper studies the role of various forces affecting savings in quantitative models of wealth inequality, discusses their successes and failures in accounting for the observed facts, and compares these model's implications with Piketty's conclusions.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.","PeriodicalId":282303,"journal":{"name":"ERN: Equity","volume":"94 12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129984386","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}