nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2016‒01‒29
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Intertemporal pro-poorness By Florent Bresson; Jean-Yves Duclos; Flaviana Palmisano
  2. Measurement of inequality of opportunity based on counterfactuals By Dirk Van de gaer; Xavier Ramos
  3. Wages and Informality in Developing Countries By Costas Meghir; Renata Narita; Jean-Marc Robin
  4. Productivity, social expenditure and income distribution in Latin America By Cimoli, Mario; Martins, Antonio; Porcile, Gabriel; Sossdorf, Fernando
  5. Redistribution Through Charity, and Optimal Taxation when People are Concerned with Social Status By Thomas Aronsson; Olof Johansson-Stenman; Ronald Wendner

  1. By: Florent Bresson; Jean-Yves Duclos; Flaviana Palmisano
    Abstract: A long-lasting scientific and policy debate queries the impact of growth on distribution. A specific branch of the micro-oriented literature, known as ‘pro-poor growth’, seeks in particular to understand the impact of growth on poverty. Much of that literature supposes that the distributional impact should be measured in an anonymous fashion. The income dynamics and mobility impacts of growth are thus ignored. The paper extends this framework in two important manners. First, the paper uses an ‘intertemporal pro-poorness’ formulation that accounts separately for anonymous and mobility growth impacts. Second, the paper’s treatment of mobility encompasses both the benefit of “mobility as equalizer” and the variability cost of poverty transiency. Several decompositions are proposed to measure the importance of each of these impacts of growth on the pro-poorness of distributional changes. The framework is applied to panel data on 23 European countries drawn from the ‘European Union Statistics on Income and Living Conditions’ (EU-SILC) survey.
    Keywords: pro-poorness, income mobility, growth, poverty dynamics.
    JEL: D31 D63 I32
    Date: 2015
  2. By: Dirk Van de gaer (Department of Social Economics, Ghent University, Belgium); Xavier Ramos (Depart Econ Aplicada, Universitat Autonoma de Barcelona, Spain)
    Abstract: The theoretical literature on inequality of opportunity formulates basic properties that measures of inequality of opportunity should have. Standard methods for the measurement of inequality of opportunity require the construction of counterfactual outcome distributions through statistical methods. We show that, when standard parametric procedures are used to construct the counterfactuals, the specification used determines whether the resulting measures of inequality of opportunity satisfy the basic properties.
    Keywords: Counterfactuals, inequality measurement, opportunities.
    Date: 2015–12
  3. By: Costas Meghir (Economics department); Renata Narita (Universidade de São Paulo (USP)); Jean-Marc Robin (Département d'économie)
    Abstract: We develop an equilibrium wage-posting model with heterogeneous firms that decide to locate in the formal or the informal sector and workers who search randomly on and off the job. We estimate the model on Brazilian labor force survey data. In equilibrium, firms of equal productivity locate in different sectors, a fact observed in the data. Wages are characterized by compensating differentials. We show that tightening enforcement does not increase unemployment and increases wages, total output, and welfare by enabling better allocation of workers to higher productivity jobs and improving competition in the formal labor market.
    Keywords: Equilibrium wage-posting model; Brazilian labor; Formal labor market
    JEL: E26 J24 J31 O15
    Date: 2015–04
  4. By: Cimoli, Mario; Martins, Antonio; Porcile, Gabriel; Sossdorf, Fernando (Comisión Económica para América Latina y el Caribe (CEPAL) United Nations)
    Abstract: This paper discusses the role of institutions and structural change in shaping income inequality. It is argued that while social expenditure and direct redistribution are crucial for improving income distribution, sustainable equality requires structural change to create decent jobs. The relative importance of these variables in different countries is analyzed and a typology suggested. It is argued that the most equal countries in the world combine strong institutions in favor of redistribution and knowledge-intensive production structures that sustain growth and employment in the long run. Both institutions and the production structure in Latin America fail to foster equality and this explains its extremely high levels of inequality. The last decade witnessed significant advances in reducing inequality in Latin America, but these advances are threatened by slow productivity growth and weak structural change.
    Date: 2015–11
  5. By: Thomas Aronsson (Umea University); Olof Johansson-Stenman (University of Gothenburg); Ronald Wendner (University of Graz)
    Abstract: This paper deals with tax policy responses to charitable giving based on a model of optimal redistributive income taxation. The major contribution is the simultaneous treatment of (i) warm-glow and stigma effects of charitable donations; (ii) that the warm glow of giving and stigma of receiving charity may to some extent depend on relative comparisons; and (iii) that people are also concerned with their relative consumption more generally. Whether charity should be taxed or supported turns out to largely depend on the relative strengths of the warm glow of giving and the stigma of receiving charity, respectively, and on the positional externalities caused by charitable donations. In addition, imposing stigma on the mimicker (via a relaxation of the self-selection constraint) strengthens the case for subsidizing charity. We also consider a case where the government is unable to target the charitable giving through a direct tax instrument, and examine how the optimal marginal income tax structure is adjusted in response to charitable giving.
    Keywords: Conspicuous consumption; conspicuous charitable giving; optimal income taxation; warm glow; stigma
    JEL: D03 D62 H21 H23
    Date: 2016–01

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