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on Unemployment, Inequality and Poverty |
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Issue of 2024‒02‒26
five papers chosen by |
| By: | John List |
| Abstract: | In 2019, I put together a summary of data from my field experiments website that pertained to artefactual field experiments. Several people have asked me if I have an update. In this document I update all figures and numbers to show the details for the year 2023. I also include the description from the 2019 paper below. The definition of artefactual field experiments comes originally from Harrison and List (2004) and is advanced in List (2024). |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:feb:artefa:00782&r=ltv |
| By: | Nicolas HÉRAULT; Stephen P. JENKINS |
| Abstract: | We decompose the redistributive effect of direct taxes into vertical, horizontal, and reranking components applying the methods of Urban and Lambert (Public Finance Review, 2008). In the first such application to the UK, and using yearly data covering 1977–2020, we find that redistributive effect increased over the period. However, there is no clear trend in horizontal inequity and this component forms a very small fraction of total redistributive effect by comparison with reranking and especially vertical components. It is also the vertical component that best tracks trends in redistributive effect. We give specific attention to the choice of the bandwidth used to define ‘close equals’ in terms of pre-tax income. We also show that implausible estimates of the horizontal inequity component arise for some years regardless of bandwidth used. |
| Keywords: | Redistributive effect; redistribution; horizontal inequity; reranking; Urban-Lambert decomposition; income tax |
| JEL: | D31 H24 H50 I38 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:grt:bdxewp:2023-11&r=ltv |
| By: | Aljosha Henkel (KOF Swiss Economic Institute, ETH Zurich, Leonhardstrasse 21, 8092 Zurich, Switzerland); Ernst Fehr (Department of Economics, University of Zurich, Blümlisalpstrasse 10, 8006 Zurich, Switzerland); Julien Senn (Department of Economics, University of Zurich, Blümlisalpstrasse 10, 8006 Zurich, Switzerland); Thomas Epper (IESEG School of Management, University of Lille, CNRS, UMR 9221 - LEM - Lille Economie Management, F-59000 Lille, France) |
| Abstract: | Do beliefs about inequality depend on distributive preferences? What is the joint role of preferences and beliefs about inequality for support for redistribution? We study these questions in a staggered experiment with a representative sample of the Swiss population conducted in the context of a vote on a highly redistributive policy proposal. Our sample comprises a majority of inequality averse subjects, a sizeable group of altruistic subjects, and a minority of predominantly selfish subjects. Irrespective of preference types, individuals vastly overestimate the extent of income inequality. An information intervention successfully corrects these large misperceptions for all types, but essentially does not affect aggregate support for redistribution. These results hide, however, important heterogeneity because the effects of beliefs about inequality for demand for redistribution are preference-dependent: only affluent inequality averse individuals, but not the selfish and altruistic ones, significantly reduce their support for redistribution. These findings cast a new light on the seemingly puzzling result that, in the aggregate, large changes in beliefs about inequality often do not translate into changes in demand for redistribution. |
| Keywords: | Social Preferences, Beliefs about Inequality, Preferences for Redistribution, Information, Inequality Aversion |
| JEL: | D31 D72 H23 H24 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:ies:wpaper:e202402&r=ltv |
| By: | Thomas Epper (IESEG School of Management, Univ. Lille, CNRS, UMR 9221 - LEM - Lille Economie Management F-59000 Lille, France); Julien Senn (Department of Economics, Zurich University. Blümlisalpstrasse 10, 8006 Zurich, Switzerland); Ernst Fehr (Department of Economics, Zurich University. Blüumlisalpstrasse 10, 8006 Zurich, Switzerland) |
| Abstract: | The empirical evidence on the existence of social preferences—or lack thereof—is predominantly based on student samples. Yet, knowledge about whether these findings can be extended to the general population is still scarce. In this paper, we compare the distribution of social preferences in a student and in a representative general population sample. Using descriptive analysis and a rigorous clustering approach, we show that the distribution of the general population’s social preferences fundamentally differs from the students’ distribution. In the general population, three types emerge: an inequality averse, an altruistic, and a selfish type. In contrast, only the altruistic and the selfish types emerge in the student population. We show that differences in age and education are likely to explain these results. Younger and more educated individuals—which typically characterize students—not only tend to have lower degrees of other-regardingness but this reduction in other-regardingness radically reduces the share of inequality aversion among students. Differences in income, however, do not seem to affect social preferences. We corroborate our findings by examining nine further data sets that lead to a similar conclusion: students are far less inequality averse than the general population. These findings are important in view of the fact that almost all applications of social preference ideas involve the general population. |
| Keywords: | Social Preferences, Altruism, Inequality Aversion, Preference Heterogeneity, Subject pools, Sample Selection |
| JEL: | C80 C90 D30 D63 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:ies:wpaper:e202401&r=ltv |
| By: | Hamermesh, Daniel S. (University of Texas at Austin); Zhang, Anwen (University of Glasgow) |
| Abstract: | Since the mapping of the human genome in 2004, biologists have demonstrated genetic links to the expression of several income-enhancing physical traits. To illustrate how heredity produces intergenerational economic effects, this study uses one trait, beauty, to infer the extent to which parents' physical characteristics transmit inequality across generations. Analyses of a large-scale longitudinal dataset in the U.S., and a much smaller dataset of Chinese parents and children, show that a one standard-deviation increase in parents' looks is associated with a 0.4 standard-deviation increase in their child's looks. A large data set of U.S. siblings shows a correlation of their beauty consistent with the same expression of their genetic similarity, as does a small sample of billionaire siblings. Coupling these estimates with parameter estimates from the literatures describing the impact of beauty on earnings and the intergenerational elasticity of income suggests that one standard-deviation difference in parents' looks generates a 0.06 standard-deviation difference in their adult child's earnings, which amounts to additional annual earnings in the U.S. of about $2300. |
| Keywords: | intergenerational transmission, inequality, beauty |
| JEL: | D64 D31 J71 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16742&r=ltv |