{"title":"Inequality, Relative Deprivation and Financial Distress - Evidence from Swedish Register Data","authors":"P. Roth","doi":"10.2139/ssrn.3746651","DOIUrl":"https://doi.org/10.2139/ssrn.3746651","url":null,"abstract":"\u0000 Several studies have linked rising insolvency rates to increasing inequality and argued that this might be explained by individuals' desire to “Keep up with the Joneses”. Using unique administrative register data on individual insolvencies in Sweden, I test whether the probability to become insolvent is related to one's income distance relative to peers. Identification relies on area fixed effects, an extensive set of background characteristics and varying the definition of the relevant reference group. I find that higher inequality increases the individual's probability to become insolvent and that this effect is mostly driven by men.","PeriodicalId":346888,"journal":{"name":"PSN: Income Inequality (Topic)","volume":"156 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121478800","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}
{"title":"Institutional Design and Spatial (In)equality – The Janus Face of Economic Integration","authors":"Ingrid Ott, S. Soretz","doi":"10.2139/ssrn.3675371","DOIUrl":"https://doi.org/10.2139/ssrn.3675371","url":null,"abstract":"This paper analyzes within a spatial endogenous growth setting the impact of public policy coordination on agglomeration. Governments in each of the two symmetric regions provide a local public input that becomes globally effective due to economic integration. Micro-foundation of governmental behavior is based on three different coordination schemes: autarky, full or partial coordination. Scale effects act as agglomeration force and in addition to private capital agglomeration increase the concentration of the public input. Integration promotes dispersion forces with respect to the distribution of physical capital which are based on decreasing private returns. However, within the governments’ decision on the concentration of the public input, increasing integration reinforces agglomeration because it promotes the inter-regional productive use of the public input. Taking feedback effects between the private and the public sector into account leads to mutual reinforcement, hence agglomeration forces almost always dominate and the spreading equilibrium becomes unstable. If convergence is a separate (additional) political objective, it needs sustained additional political effort.","PeriodicalId":346888,"journal":{"name":"PSN: Income Inequality (Topic)","volume":"109 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-08-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133825420","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}
P. Veneri, A. Comandon, Miquel-Àngel Garcia-López, Michiel N. Daams
{"title":"What Do Divided Cities Have in Common? An International Comparison of Income Segregation","authors":"P. Veneri, A. Comandon, Miquel-Àngel Garcia-López, Michiel N. Daams","doi":"10.2139/ssrn.3685834","DOIUrl":"https://doi.org/10.2139/ssrn.3685834","url":null,"abstract":"This paper provides a comparative assessment of income segregation within cities in 12 countries. We use spatial entropy indexes based on small-scale gridded income data and consistent definition of city boundaries to ensure international comparability of our segregation measures. Results show considerable variation in the levels of income segregation across cities, even within countries, reflecting the diversity of cities within urban systems. Larger, more affluent, productive, and more unequal cities tend to be more segregated. Urban form, demographic, and economic factors explain additional variation in segregation levels through the influence of high-income households, who tend to be the most segregated. The positive association between productivity and segregation is mitigated in polycentric cities.","PeriodicalId":346888,"journal":{"name":"PSN: Income Inequality (Topic)","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124898791","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}
{"title":"Tax-Induced Inequalities in the Sharing Economy","authors":"Yao Cui, A. M. Davis","doi":"10.2139/ssrn.3376992","DOIUrl":"https://doi.org/10.2139/ssrn.3376992","url":null,"abstract":"The growth of sharing economy marketplaces like Airbnb has generated discussions on their socioeconomic impact and lack of regulation. As a result, most major cities in the United States have started to collect an “occupancy tax” for Airbnb bookings. In this study, we investigate the heterogeneous treatment effects of the occupancy tax policy on Airbnb listings, using a combination of a generalized causal forest methodology and a difference-in-differences framework. While we find that the introduction of the tax significantly reduces both listing revenues and sales, more importantly, these effects are disproportionately more pronounced for residential hosts with single shared-space (nontarget) listings versus commercial hosts with multiple properties or entire-space (target) listings. We further show that this unintended consequence is caused by customers’ discriminatory tax aversion against nontarget listings. We then leverage these empirical results by prescribing how hosts should optimally set prices in response to the occupancy tax and identify the discriminatory tax rates that would equalize the tax’s effect across nontarget and target listings. This paper was accepted by Victor Martínez-de-Albéniz, operations management.","PeriodicalId":346888,"journal":{"name":"PSN: Income Inequality (Topic)","volume":"97 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127161528","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}
{"title":"Nota Sobre a Distribuição Desigual do Crescimento no Brasil, 1960 a 1970 (A Note on the Unequal Distribution of Growth in Brazil, 1960 to 1970)","authors":"Rogerio J Barbosa, M. Medeiros","doi":"10.2139/SSRN.3563910","DOIUrl":"https://doi.org/10.2139/SSRN.3563910","url":null,"abstract":"Portuguese Abstract: Resultados preliminares de uma agenda de estudo mais ampla indicam que o crescimento na renda do trabalho no Brasil entre 1960 e 1970 foi altamente pro-ricos, com parcelas de trabalhadores tendo perdas ou permanecendo estagnados. Estes resultados foram obtidos a partir de tabulacoes e microdados de pesquisas amostrais das decadas de 1960 e 1970. \u0000 \u0000English Abstract: The preliminary results of our broader research agenda suggest that the growth in earnings in Brazil between 1960 and 1970 was highly pro-rich, with shares of the workers having losses or stagnating. These results were obtained using tabulations and microdata from surveys in the 1960s and 1970s.","PeriodicalId":346888,"journal":{"name":"PSN: Income Inequality (Topic)","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126327702","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}
{"title":"A Review of Thomas Sowell's Discrimination and Disparities","authors":"Jennifer L. Doleac","doi":"10.2139/ssrn.3532411","DOIUrl":"https://doi.org/10.2139/ssrn.3532411","url":null,"abstract":"In Discrimination and Disparities, Thomas Sowell describes how economists think about the causes of disparities in socioeconomic outcomes. He cautions against government intervention to reduce disparities, noting that such interventions often have unintended consequences. In this review, I discuss the role of economic theory and empirical evidence in helping move society towards more equitable outcomes. I find far more reason to be hopeful about the role of government than Sowell does, but also argue for more experimentation and rigorous evaluation to be sure that our well-intentioned policies have their intended impacts.","PeriodicalId":346888,"journal":{"name":"PSN: Income Inequality (Topic)","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-02-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125545182","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}
{"title":"The Effect of Income-Based Mandates on the Demand for Private Hospital Insurance and its Dynamics","authors":"T. Buchmueller, T. Cheng, N. Pham, K. E. Staub","doi":"10.2139/ssrn.3506380","DOIUrl":"https://doi.org/10.2139/ssrn.3506380","url":null,"abstract":"We examine the effect of an income-based mandate on the demand for private hospital insurance and its dynamics in Australia. The mandate, known as the Medicare Levy Surcharge (MLS), is a levy on taxable income that applies to high-income individuals who choose not to buy private hospital insurance. Our identification strategy exploits changes in MLS liability arising from both year-to-year income fluctuations, and a reform where income thresholds were increased significantly. Using data from the Household, Income and Labour Dynamics in Australia longitudinal survey, we estimate dynamic panel data models that account for persistence in the decision to purchase insurance stemming from unobserved heterogeneity and state dependence. Our results indicate that being subject to the MLS penalty in a given year increases the probability of purchasing private hospital insurance by between 2 to 3 percent in that year. If subject to the penalty permanently, this probability grows further over the following years, reaching 13 percent after a decade. We also find evidence of a marked asymmetric effect of the MLS, where the effect of the penalty is about twice as large for individuals becoming liable compared with those going from being liable to not being liable. Our results further show that the mandate has a larger effect on individuals who are younger.","PeriodicalId":346888,"journal":{"name":"PSN: Income Inequality (Topic)","volume":"219 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-12-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134059029","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}
{"title":"Farewell President! Political Favoritism, Economic Inequality, and Political Polarization","authors":"Hui-Pei Cheng, E. Swee","doi":"10.2139/ssrn.3419695","DOIUrl":"https://doi.org/10.2139/ssrn.3419695","url":null,"abstract":"This paper examines the effect of political favoritism on economic inequality in the short run and political polarization in the long run. We exploit the sudden death of an authoritarian leader - President Chiang Ching-Kuo of Taiwan - in 1988 to generate plausibly exogenous variation in partiality. We find that Chiang's nationalist regime conducted political favoritism broadly toward political immigrants via cronyism (allocating public sector positions) and also differentially toward specific subgroups of political immigrants via wage discrimination (offering higher payroll to these subgroups within the public sector). Favoritism led to a 7.2 percent immigrant payroll premium, which accounted for nearly three quarters of the immigrant-native payroll gap at the time. This in turn propelled overall income inequality by 4.5 percent. Moreover, political favoritism breeds political polarization in the long run by pulling apart the political views of immigrants and natives. Compared with natives, immigrants who were exposed to favoritism tend to adopt political positions that are aligned with the nationalist party today: they are more likely to support unification with China, and are more inclined to trust the mainland Chinese government and its citizens. Exposed immigrant (native) swing voters are also more (less) likely to vote for the nationalist party today.","PeriodicalId":346888,"journal":{"name":"PSN: Income Inequality (Topic)","volume":"26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117121016","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}
{"title":"The 0.0003 Percent: Short-Run Dynamics of Extreme Wealth in America","authors":"Arshad Mirza, Nirvikar Singh","doi":"10.2139/ssrn.3408794","DOIUrl":"https://doi.org/10.2139/ssrn.3408794","url":null,"abstract":"This paper analyzes the short-run dynamics and changing sources of wealth among the Forbes 400 list of the wealthiest individuals in the United States, using annual data for 12 years spanning before and after the financial crisis of 2008-9. Over the entire time period the growth of wealth was negatively related to the previous years’ wealth, implying a slight degree of wealth convergence within the group. We find that the overall growth of the group’s wealth slowed after the crisis but stayed well above the GDP growth rate. Considering the interaction of growth of wealth with personal characteristics, we find that those who can be classified as self-made had a higher average wealth growth rate than their counterparts, although this lead narrowed after the financial crisis, during the Great Recession. Similarly, those with advanced degrees also had higher average growth of wealth in the pre-crisis period. We also examine the mobility of in and out of the Forbes 400, and find that turnover was higher in the period prior to the financial crisis, particularly for self-made individuals and those with advanced degrees. The self-made were also more likely to rise in rank within the Forbes 400 conditional on persisting in the list. By employing an innovative method of dealing with selection bias in a truncated panel, we are able to ascertain that our results are not driven by these biases. We also find some differences in these patterns at the sectoral level, compared to the aggregate group.","PeriodicalId":346888,"journal":{"name":"PSN: Income Inequality (Topic)","volume":"82 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-06-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122695816","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}
Alain Cohn, Lasse J. Jessen, Marko Klašnja, Paul Smeets
{"title":"Why Do the Rich Oppose Redistribution? An Experiment with America’s Top 5%","authors":"Alain Cohn, Lasse J. Jessen, Marko Klašnja, Paul Smeets","doi":"10.2139/ssrn.3395213","DOIUrl":"https://doi.org/10.2139/ssrn.3395213","url":null,"abstract":"Wealthy individuals have a disproportionate influence on politics and firms. We study attitudes toward redistribution of a large sample of the top 5% in the U.S. in terms of income and financial assets, and find that they prefer less redistribution than a representative sample of the bottom 95%. The differences in tax attitudes and political views can be largely attributed to differences in distributional preferences, which we measured in an experiment where choices affected the pay of pairs of workers in a real-effort task. Wealthy Americans redistribute less to the low-income worker, thus accepting more inequality than the rest of the population. The gap in distributional preferences is primarily driven by individuals who acquired wealth over their lifetime rather than those who were born into wealth. Our findings raise the possibility that wealthy individuals contribute to the persistent income inequality in the U.S.","PeriodicalId":346888,"journal":{"name":"PSN: Income Inequality (Topic)","volume":"51 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-05-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134517045","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}