Corporate responsibility for less income inequality

This article explores corporate responsibility for less income inequality within the boundaries of the organization and with regard to society at large. Instead of examining the entire range of income distribution, the focus is on the lower and upper ends. The ‘floor’ is defined as a living wage, supported by strong economic and ethical arguments and proposed as a minimal income standard that can – and thus should – be implemented by companies. As for the ethically acceptable ‘ceiling’ of executive compensation, its identification and justification are more complicated. However, strong economic and ethical arguments can be made in favor of a drastic reduction of executive pay. Corporate responsibility for less income inequality in society means, first, to ‘walk the talk’ and set an example and, second, to being ‘a good corporate citizen’ by supporting legislation for a living wage and an ethically acceptable ceiling of executive pay.     

How do income and education affect health inequality: evidence from four developing countries

Using household survey data from four countries ? Albania, Nepal, Tajikistan and Tanzania ? this article calculates income-related inequality in health care utilization. We measure health disparity separately for generally and chronically ill individuals by constructing two models: one for the probability of a visit to a physician and another for the number of visits. Following model-based measurements, we decompose inequality into two major parts: one accounted for by identity-related factors and another by socioeconomic and other factors such as education, geography and distance to a clinic. We propose a new method to quantify the effect of changes in income and education on health disparity. One of our important findings suggests that health disparity is pro-rich in all our sample countries. The pro-rich disparity is prevalent among generally ill as well as chronically ill patients, in both visit probability and visit frequency models. Health inequality seems primarily driven by income differences followed by nonidentity factors. Further, the principle of equal treatment for equal need is not fulfilled in any of our countries. Among policy implications, increasing average income and education in a way that also reduces disparity in income and education, respectively, will substantially shrink inequality in health care utilization.     

Finance and income inequality in Kazakhstan: evidence since transition with policy suggestions

Kazakhstan gained independence in 1990 and has undergone significant changes in economic, social and trade conditions since then. We analyse the effects of financial development on income inequality in Kazakhstan, incorporating economic growth, foreign investment, education and the role of democracy as the drivers. We establish that income inequality in Kazakhstan is impaired by financial development. In summary, we send three messages for policy purposes. First, strengthening financial sector is necessary to close the gap between ‘haves and have-nots’. Second, attracting FDI beyond the hydrocarbon sector is necessary to alleviate inequality. Finally, adaptation of education system to the new social and economic environment would help in improving income distribution.     

The labour market and the distribution of earnings: an empirical analysis for Italy

Using four waves of data from the Participation Labour Unemployment Survey, a database of information on the Italian labour market supply, we address the question of earnings dispersion by applying a ‘nested’ decomposition procedure of the Theil inequality measure, which combines into a unified framework the standard decompositions by population subgroups and income sources. The empirical evidence obtained points to the key role played by the self-employees in shaping labour income inequality, especially at the upper extreme of the earnings distribution, and the emergence of non-standard forms of employment as an important feature of the contemporary workplace.     

Refitting the Kuznets curve using a gender-specific threshold model

Previous studies have reached mixed conclusions regarding the relationship between inequality and per capita income. These studies, however, fail to consider gender differences in income inequality and how these may impact on the relationship between income inequality and per capita income. Using Australian taxation statistics, we derive three sets of Gini coefficients (i.e. female, male and total) for the period 1950–2013. We then examine the relationship between inequality and real per capita income and find that a gender-specific threshold panel regression outperforms three other conventional models. Our findings suggest that ‘one set of coefficients does not fit all’ in that the use of aggregate and constant coefficients may mask variations within, and between, gender inequality over time.     

Income Distribution,Econophysics and Piketty

Piketty, Atkinson and Saez have put the analysis of income distribution back on center stage. The distinction between property income and labor income plays a central role in this framework. Property income derives from the rate of return on stocks of income-earning wealth and is more unequally distributed than labor income. Piketty argues that, because the rate of return (r) is generally greater than the rate of growth of the economy (g), property income tends to grow more rapidly than labor income, so that rising income inequality is an intrinsic tendency of capitalism despite interruptions due to world wars and great depressions. This article argues the exact opposite. The rise of unions and the welfare state were the fruits of long-term historical gains made by labor, and the postwar constraints on real and financial capital arose in sensible reaction to the Great Depression. The ‘neoliberal’ era beginning in the 1980s significantly rolled back all of these. The article uses the econophysics two-class argument of Yakovenko to show that we can explain the empirical degree of inequality using two factors alone: the profit share and the degree of financialization of income. The rise of inequality in the neoliberal era then derives from a reduction in the wage share (rise in the profit share) in the face of assaults on labor and the welfare state, and a sharp increase in the financialization of incomes as financial controls are weakened. These are inherently socio-political outcomes, and what was lost can be regained. Hence, there is no inevitable return to Piketty’s ‘patrimonial capitalism’.     

公共支出结构对收入不均等影响研究——基于公共服务均等化视角分析

收入不均等影响到社会公平与经济发展,而收入公平分配是政府的主要责任,也是政府公共支出的依据之一.影响收入分配不均等的因素有很多,其中由于政府相应责任缺位,公共支出结构偏向,使得公共支出中基本公共服务支出不足是其主要原因.本文实证分析得出公共支出总量与结构严重影响基本公共服务供给,进而影响着收入不均等的水平,成为社会公平和稳定的重要因素.政府应从制度上进行公共支出改革,规范督促地方政府优化公共支出结构,不断提高对民生支出的主动性,逐步缩小基本公共服务的差距,缩小收入不均等的水平.     

Income comparison and happiness: The role of fair income distribution

Relative income gap is one of the most popular approaches for explaining the income–happiness relationship. We argue in this article that when people compare their incomes, they care about distributional fairness more than relative income disparity. It is difficult for us to explain China's income–happiness paradox if we simply compare the income gap and do not explore the income‐generation process leading to income inequality. We therefore employ an approach based on a responsibility‐sensitive theory of justice that decomposes individual income into fair and unfair components. As a proxy for distributional unfairness, unfair income is considered the main source of unhappiness. Using data from the Chinese Household Income Project survey, we find strong support for the negative relationship between income unfairness and happiness. We also find a significantly positive relationship between the relative income gap and income unfairness, which leads us to consider the income comparison hypothesis as the explanation for the income–happiness paradox in a new light. Sensitivity analyses confirm the robustness of our results.     

Human capital and income inequality in India: is there a non-linear and asymmetric relationship?

The article attempts to provide empirical evidence on the relationship between human capital and income inequality in India in a non-linear and asymmetric framework. To capture both long-run and short-run asymmetries, we have employed the non-linear autoregressive distributed lag approach using the relevant data from 1970 to 2016. Findings of the article suggest that education expansion acts as a major factor in reducing prevailing high income inequality, that is an increase in average years of schooling results in more equal distribution of income. In contrast, high economic growth, inflation and trade openness create unequal distribution of income. The asymmetric causality test results indicate that there is unidirectional causality running from female human capital, economic growth and inflation to income inequality. From a policy perspective, we suggest that education expansion should be used as a powerful tool to mitigate income inequality by emphasizing the quality of education. At the same time, policies geared towards social benefits, inclusive education, training for unskilled workers and price stability should be encouraged to attain fair income distribution in India.     

Decomposing differences in health and inequality using quasi-objective health indices

People in Canada and the United States often make claims regarding whose country has a better health system. Several researchers have attempted to address this question by analysing subjective health measures in the two countries, thus assuming a common definition of ‘good’ health. Using data from the Joint Canada/US Survey of Health, which provides rich and comparable health information for the two countries, I generate two quasi-objective health indices and show that Canadians and Americans define ‘good’ health differently. After controlling for cross-country reporting heterogeneity, health differences between Americans and Canadians are eliminated for intermediate health statuses, while health differences at the tails of the health distribution lead to slightly better average population health in Canada. With respect to health inequality, my results show that income and education gradients increase steeply with poor health in both countries. Hence, considering differences along the health distribution is crucial when assessing population health or health inequality.     

Testing inequality of opportunities in Italy using the ANOVA framework

While the analysis of inequality has been central to economic studies for centuries, it was only in recent years that studies have concentrated on the distinction between inequality of opportunity and inequality of returns to effort and have attempted empirical estimates of the two components. The decomposition of a general inequality index into these two components allows to analyse the prevalence of fair or unfair income inequality within a country. This paper suggests to test the differences between the two sources of inequality in a simple way using the ANOVA framework adapted to decompose the coefficient of variation, to better suit the requirements of an inequality index. The proposed procedure is applied to the Italian Survey on Income and Living Condition (IT-SILC data, wave 2005 and 2011). The empirical results help identifying the circumstances that foster the rise of inequality of opportunities in Italy. Our analysis shows, in particular, that father education, region of residence and gender result as the most relevant circumstances determining inequality of opportunity. On the other side, the role of mother education starting from a lower level as an inequality of opportunity factor has increased its influence over time.     

Influence Factors on Gender Wage Gap: Evidences from Chinese Household Income Project Survey

By constructing a gender wage gap evolution model, this paper examines the source and evolutionary process of gender wage inequality from a theoretical perspective. The purpose of this study is thoroughly investigating the factors affecting the gender wage inequality from the perspective of gender discrimination and variations in non-gender endowments. Based on the Chinese Household Income Project Survey Data, this study indicates that: (1) since companies continue to re-evaluate the gender endowment value of gender, the gender wage inequality exhibits an endogenous sustainability and self-reinforcing effect. (2) The gender wage gap of urban residents is derived mainly from the top tier of wages, while the gender wage gap of the migrant people is mainly determined from the bottom rung of wages. (3) Female age has a ‘U-curve’ impact on gender wage inequality from the standpoint of non-gender endowment differences, and the female age has an ‘inverted U-curve’ impact on gender wage inequality as a result of discrimination. (4) Female appearance and actual work hours are insufficient to affect the changing trend of gender wage inequality; however, h-register location and marital status are still considered to be very important.     

Employment polarisation and inequality in the UK and Hungary

This paper uses household budget survey microdata to explorethe growth in household income inequality in Hungary in theperiod 1987–1995, and compares it with inequality in theUK in 1995–96. Decomposition of inequality according toboth household characteristics and income sources shows that,while inequality did grow rapidly in Hungary over the earlyTransition period, several factors prevented its growth to higherlevels. One of these factors, the distribution of employmentand earnings between households, is explored in some detail.While there was considerable polarisation between householdswith and without employed members in the UK in 1995–96,this was less of a feature in Hungary, in spite of a massivewithdrawal of men and women from the labour market between 1987and 1995. Rather, a narrowing of the gender pay gap and a continuedhigh level of female participation in employment appears tohave ensured that, even as earnings inequality in Hungary increasedto the extent that it surpassed earnings inequality in the UK,the distribution of household earnings, and the distributionof household incomes, remained more equal in Hungary.     

The impact of redistributive policies on inequality in OECD countries

Due to behavioural effects triggered by redistributional interventions, it is still an open question whether government policies are able to effectively reduce income inequality. We contribute to this research question by using different country-level data sources to study inequality trends in OECD countries since 1980. We first investigate the development of inequality over time before analysing the question of whether governments can effectively reduce inequality. Different identification strategies, using fixed effects and instrumental variables models, provide some evidence that governments are capable of reducing income inequality despite countervailing behavioural responses. The effect is stronger for social expenditure policies than for progressive taxation.     

中国农村居民收入区域不平衡的动态变化及影响因素——基于人口加权变异系数的分析

论文使用人口加权变异系数探析1993—2009年中国农村居民收入区域不平衡的动态变化,并通过对人口加权变异系数进行空间和收入来源的二重分解,分析这种变化的空间和收入来源影响因素。研究发现,中国农村居民收入区域不平衡程度总体上趋于下降,但自1998年以来下降幅度很小。东部、中部、西部和东北四大区域之间的农村居民收入不平衡是影响中国农村居民收入区域不平衡的主要因素,其次是这四大区域内部的不平衡。从收入来源看,工资性收入是导致中国农村居民收入区域不平衡的最主要因素,其次是家庭经营性收入。     

Household Income Inequality and Income Mobility: Implications Towards Equalizing Longer-Term Incomes in India

This paper addresses three important questions. First, what are the trends, levels and sources of income inequality in India? Second, how have been the patterns of income mobility? And finally, exploring the relationship between income mobility and income inequality in the context of India. Results, based on recent India Human Development Survey (IHDS) longitudinal data, advocate that not only is income inequality very high, nonetheless, it has increased – mainly attributable to different income sources – in India. The paper also focused on whether or not this income mobility equalizes longer-term incomes. Results suggest income mobility has resulted in-albeit not robust- equalizing longer-term incomes. Thus, based on imperative findings, the paper suggests, the nature of longer-term well-being is crucial to designing policy interventions to effectively tackle inequality and in this context, economic mobility can be seen as an avenue to long-term equality.     

Report of China Household Income Disparity

Based on China Household Finance Survey (CHFS) data, China’s Gini Coefficient stood at 0.61 in 2010, above the global average of 0.44, according to the World Bank. The high Gini Coefficient represents a large income disparity of the country. It is understandable that a high Gini is common in fast-growing economies and can be reduced through government’s transfer payments given the experience of OECD countries. This paper illustrates the breakdown of China’s Gini, regional, rural and urban differences in household income. Specifically, it is found that poor health, insufficient social welfare and low education level are the main reasons for poverty of rural households. This paper also provides solutions to reduce the Gini coefficient. In the short term, China government can invest more on social insurance and implement large-scale transfer payments. The figure shows that China government has sufficient financial sources to strengthen secondary distribution to subsidize the low-income group. In the long term, government can increase overall educational level and reduce the opportunity inequality to narrow the income gap.     

International income inequality, 2005–2011: what a difference 6 years can make

While much attention has recently been given to the rising inequality in high-income countries, particularly the US, inequality across countries has received less attention. Based on reports of the International Comparison Program, which provide the most accurate measures of PPP income at the country level, this study computes three highly recommended measures of intercountry income inequality for the years 2005 and 2011. A dramatic, and perhaps unprecedented, fall in intercountry inequality over the relatively short period of 6 years is noted. As a correlate of the fall in intercountry inequality, aggregate PPP GDP for six major high-income countries is compared with that for three large developing countries, and the dramatic increase over the 6-year period in the ratio of the total GDP of the three developing countries to that for the six high-income countries is noted, thus extending, from the most accurate data, the theme of the ‘rise of the South’ articulated in Human Development Report 2013.     

我国居民收入不平等的主要原因：市场还是政府政策？

市场因素和政府收入再分配政策是决定一国居民收入不平等程度的两个重要因素。本文采用中国家庭收入调查（China Household Income Project ,CHIP）住户数据,计算出我国居民市场收入基尼系数与可支配收入基尼系数,并同发达国家进行比较,借此探讨目前我国居民收入不平等是由市场力量造成的,还是政府收入再分配政策力度不足的结果。研究发现,从市场收入基尼系数来看,我国与发达国家之间的差距并不大。由此认为,政府收入再分配政策效果不明显是导致我国居民收入分配不平等状况较发达国家严重的主要原因。加大转移支付等再分配政策力度是缓解和改善目前我国居民收入不平等的主要途径。