HOUSEHOLD INEQUALITY AND THE LABOR MARKET IN SOUTH AFRICA

There has been very little detailed exploration of the relationship between wage income and household inequality in South Africa despite the relevance of this issue for many contemporary growth and development policy debates. This article is directed at such an analysis. It uses a decomposition of household income inequality by income components to highlight the dominance of wage income in driving overall income inequality. This is followed by a detailed discussion of the distribution of the unemployed across different wage-earning household categories. Many of the unemployed are seen to depend on wage earners within their households, but a significant percentage of the unemployed, especially in rural areas, have no direct link to labor market earners. In such cases, the creation of employment is essential. The conclusion explores policy implications by linking our empirical findings to South African debates over the quality versus the quantity of employment.     

Assessment of the effects of targeted poverty alleviation policy on differently poverty-stricken households: A multi-propensity score weighting model

Eliminating poverty is a multifaceted global challenge and a focal point of global development governance. With the implementation of targeted poverty alleviation (TPA), China's poverty alleviation efforts have had significant achievements. This study provides a new perspective by classifying poverty-stricken households based on poverty root causes at the household level, a multi-propensity score weighting model based on counterfactual inference is employed to examine the poverty reduction effect and policy precision on six non-equivalent poverty-stricken household groups in a Chinese county. The results reveal that the poverty reduction effects differed among poverty-stricken households with different root causes of poverty. Specifically, households impoverished due to disability have the lowest income of the six groups. The assistance policy effects also vary significantly and are found to be poorly suited to poverty-stricken households a lack of labor force and funds. A robustness test confirms this conclusion and a more nuanced analysis reveals that these differences are reflected in the wage and transfer incomes. Therefore, to ensure the stability of poverty reduction and the sustainability of income for poverty-stricken households, relevant associated aid policies need to place different emphases based on their household characteristics.     

The Causal Effects of the Minimum Wage Introduction in Germany – An Overview

In 2015, Germany introduced a statutory hourly minimum wage that was not only universally binding but also set at a relatively high level. We discuss the short‐run effects of this new minimum wage on a wide set of socioeconomic outcomes, such as employment and working hours, earnings and wage inequality, dependent and self‐employment, as well as reservation wages and satisfaction. We also discuss difficulties in the implementation of the minimum wage and the measurement of its effects related to non‐compliance and suitability of data sources. Two years after the minimum wage introduction, the following conclusions can be drawn: while hourly wages increased for low‐wage earners, some small negative employment effects are also identifiable. The effects on aspired goals, such as poverty and inequality reduction, have not materialised in the short run. Instead, a tendency to reduce working hours is found, which alleviates the desired positive impact on monthly income. Additionally, the level of non‐compliance was substantial in the short run, thus drawing attention to problems when implementing such a wide reaching policy.     

Minimum Wage: Does it Improve Welfare in Thailand?

We study the causal impact of the minimum wage on labor market outcomes, household consumption, inequality and poverty in Thailand by relying on policy variation in minimum wages over time across provinces. We find that minimum‐wage increases have a large and significant impact on the likelihood of working in the uncovered sector among workers with elementary education. However, the impact is very small and insignificant among other labor market groups. In contrast, the minimum wage has large positive effects on the formal sector wages of low‐earning workers, such as the young, elderly and low educated. Increases in the minimum wage are associated with reductions in household poverty and consumption inequality at the bottom half of the distribution.     

Assessing the Possible Antipoverty Effects of Recent Rises in Age‐Specific Minimum Wages in New Zealand

Real minimum wages increased by nearly 33 percent for adults and 123 percent for teenagers in New Zealand between 1999 and 2008. Where fewer than 2 percent of workers were being paid a minimum wage at the outset of this sample period, more than 8 percent of adult workers and 60 percent of teenage workers were receiving hourly earnings close to the minimum wage by the end of this period. These policy changes provide a unique opportunity to estimate the effects of the minimum wage on poverty. Although minimum wage workers are more likely to live in the poorest households, they are relatively widely dispersed throughout the income distribution. This is particularly true of teenage minimum wage workers. Furthermore, low‐income households often do not contain any working members. We estimate that a 10 percent increase in minimum wages, even without a loss in employment or hours of work, would lower the relative poverty rate by less than one‐tenth of a percentage point.     

FINDING THE POOR

As a basis for judging how public policy affects the poor, this article explores how "poor" families may be defined and how well such families can be distinguished from other families in the less developed countries. This is done by seeking proxies for poverty which are relatively easy to measure, accurate in discriminating between the poor and the non-poor, and relevant to public policy. To this end, a highly parsimonious model is developed, based on truncation and regression procedures, using only family size and number of wage earners in addition to either income or an education-age combination. Application of this model to data from household surveys in three major cities of Latin America shows that the model is highly effective in pinpointing poverty households, although the pattern of errors is not random, the most frequent type of error being to classify poverty households as non-poor.
Especially significant is that the model is nearly as effective for discriminating poverty households from others when financial variables are excluded as when they are included. This would suggest that a good deal of flexibility exists in deciding what variables to include in future studies of this type. The results also suggest that even better results should be possible if more complete information is obtained on the employment status of the different members of the household and on the contribution of each to household income. Ideally, the data collection and model development should proceed in an iterative manner since there are numerous possible variables as well as alternative model formulations.     

Does Raising the Minimum Wage Help the Poor?*

What is the impact of raising the minimum wage on family incomes? Using data from the 1994–1995 to 2002–2003 Survey of Income and Housing, the characteristics of low-wage workers are analysed. Those who earn near-minimum wages are disproportionately female, unmarried and young, without postschool qualifications and overseas born. About one-third of near-minimum-wage workers are the sole worker in their household. Due to low labour force participation rates in the poorest households, minimum-wage workers are most likely to be in middle-income households. Under plausible parameters for the effect of minimum wages on hourly wages and employment, it appears unlikely that raising the minimum wage will significantly lower family income inequality.     

互联网使用与工资收入差距*——基于CHNS数据的经验分析

基于2004—2011年的中国营养与健康调查数据（CHNS）,本文使用最小二乘法和控制自选择偏差的倾向性得分匹配法详细估计了互联网使用对工资收入的影响。结果表明,互联网使用对个体工资收入有积极的影响,尤其对于拥有高中学历的个体而言,这种影响更大。本文进一步使用基于RIF回归的FFL分解方法考察了互联网使用对工资不平等的影响。本文发现,2004—2011年间互联网使用比例的增加降低了整体工资不平等,且使用过互联网的高中学历人员比例增加有助于降低高工资与中等工资收入人群的工资差距。同时,互联网使用收益率的下降也有助于降低工资不平等,尤其有助于降低高工资与中等工资收入人群之间的工资差距。因此,普及互联网使用,尤其是提高低收入群体的互联网使用比例和普及该群体的高中阶段教育对于抑制不平等的扩大有重要的意义。     

The contribution of minimum wage valorization policy to the decline in household income inequality in Brazil: A decomposition approach

There is a vast literature that estimates the effect of the minimum wage on wage inequality in various countries. However, as the minimum wage directly affects nonlabor income of families in some countries (in the Brazilian case via the benefits of the pension system and of certain social programs), this article extends the empirical analysis by studying the effects of the minimum wage on the level of inequality of household income as a whole. To accomplish that we employ a decomposition method that gauges the contribution of the increases in the minimum wage that occurred in recent decades in Brazil through the labor and nonlabor sources of household income. The results show that the minimum wage had a contribution of 64 percent to the observed fall in income inequality between 1995 and 2014 and that pensions were the most relevant channel over this period.     

城镇家庭收入差异研究——基于2005-2009年安徽省城镇家庭月度住户调查数据的分析

本文以经典的经济增长理论为基础，结合中等收入国家的特点，提出如下理论假设：通胀所造成的家庭福利损失会影响中等收入国家宏观经济的发展，进而推动相关国家陷入“中等收入陷阱”。而后通过FGLS、差分GMM，以及系统GMM的方法对陷入“中等收入陷阱”的典型国家进行回归分析。分析结果表明，在控制了基础设施、债务水平、技术创新以及储蓄率这些影响因素之后，通胀对上述国家人均GDP增长率均有显著的负向影响，即使是在年均通胀率只有514%的东亚国家组，通胀对人均GDP增长率的平均影响也达到了123个百分点～221个百分点，影响比重达到了27%～48%。所以，我们应该加强对通胀的调控，以确保我国经济能够持续健康地发展。     

From households to national statistics: Macroeconomic effects of Women's empowerment

How do shifts in intra-household gender dynamics affect the economy at large? This paper parametrizes intra-household gender-powered decision-making and endogenous distributions of income to allow for the aggregation of key macroeconomic variables. In equilibrium, we find that greater women's empowerment increases precautionary savings to offset low endowment realizations. The effect is stronger among poor households who hedge against hitting a subsistence bound. Given the boost in savings at the bottom of the distribution, more empowerment leads to less poverty and lower income inequality. Another equilibrium prediction of the model is an increase in the household's food intake regardless of income, reflecting women's greater preference for food compared to men. The model's predictions are mapped to Mexico's 2014 National Household Income and Expenditure Survey which identifies the gender of the head of the household. These predictions have policy implications in the areas of monetary policy, social policy, financial intermediation and banking.     

Wage subsidies, work incentives, and the reform of the Austrian welfare system

We analyze the employment and income effects of a needs-based minimum benefit system (“Bedarfsorientierte Mindestsicherung”) which has recently been introduced in Austria. The aim of this reform was to reduce poverty as well as to increase work incentives for recipients of social assistance. On the basis of a behavioral microsimulation model we show that this new system slightly increases employment but reduces incomes for the poorest households remaining unemployed. As an alternative, we analyze a budgetary neutral reform proposal which reduces financial incentives for marginal employment and provides a wage subsidy rewarding working longer hours. This alternative reform would yield larger positive employment effects, but more households would suffer from income losses. Overall, income inequality and poverty are affected little, however, both under the new social welfare system and the alternative reform proposal.     

SIZE-DISTRIBUTION OF EARNINGS AND HOUSEHOLD INCOMES IN SMALL SOCIALIST COUNTRIES

Part I: Availability and meaning of East European distributional statistics are discussed. Part II: Measures of inequality to be used in this study are examined: the Gini coefficient of concentration, though superior to some other single indicators, is found to be an unreliable comparative measure of inequality, and is therefore supplemented by a set of ratios of selected percentiles to the median. Part III: Inequality of full-time gross monthly earnings is measured for (almost) the whole civilian working population and for some subpopulations (selected industries, men, women) in Czechoslovakia and Yugoslavia through 1970, in Hungary through 1968: the observed inequality appears to be less than in small capitalist countries, in spite of the reversal of the socialist egalitarian trend in the 'sixties. The main factor of equalization of socialist earnings are small interoccupational and interregional differentials and a very flat age profile. Part IV: The socio-economic structure of households, the size of samples underlying the distributional statistics, and the composition of household “revenues” (wage and salary earnings, agricultural incomes, social security payments, relatively unimportant property incomes, as well as non-income cash flows) are examined. Inequality coefficients are estimated for per capita revenues of all households as well as subpopulations of households in Czechoslovakia and Hungary, and some information is given on the distribution of household incomes in Yugoslavia. Part V: Limits of desirable equalization of earnings are discussed. With very narrowly dispersed short-term earnings, lifetime earnings tend to be rather unequally distributed because of the variation of earning years among occupations. With largely equalized primary incomes, per capita household incomes tend to be more unequally distributed, in spite of massive transfers, because of the varying ratio of earners to dependents within households. The need of income differentials as incentives to work, the probable trade-off between income equality and economic growth, and socialist distributive principles are outlined.     

Effects of monetary and government spending policy on economic inequality

Using detailed micro-level income and expenditure data, we study the effects of monetary and government spending policy shocks on income and expenditure inequality in the US from 1990 to 2018. We find that expansionary monetary and government spending policy shocks systematically decrease income, disposable income and expenditure inequality. There is evidence of time variation on the effects and monetary policy and transfer payment shocks. Various impulse responses suggest that the impacts of the policy shocks increase during and after the Great Recession. The responses of income and expenditures of households at different percentiles suggest that expansionary monetary and government spending policy have a larger positive impact on households with low income and expenditures relative to those at the top of the distribution. We do not find evidence of the significant impact of Quantitative Easing policies on income inequality, however, expenditure inequality appear to increase due to the policies.     

Employment effects of introducing a minimum wage: The case of Germany

Income inequality has been a major concern of economic policy makers for several years. Can minimum wages help to mitigate inequality? In 2015, the German government introduced a nationwide statutory minimum wage to reduce income inequality by improving the labour income of low-wage employees. However, the employment effects of wage increases depend on time and region specific conditions and, hence, they cannot be known in advance. Because negative employment effects may offset the income gains for low-wage employees, it is important to evaluate minimum-wage policies empirically. We estimate the employment effects of the German minimum-wage introduction using panel regressions on the state-industry-level. We find a robust negative effect of the minimum wage on marginal and a robust positive effect on regular employment. In terms of the number of jobs, our results imply a negative overall effect. Hence, low-wage employees who are still employed are better off at the expense of those who have lost their jobs due to the minimum wage.     

The Household, Time Use and Tax Policy

This paper is concerned with modelling household decisions andthe welfare effects of tax policy. It seeks to emphasise theimportance of a model that incorporates household productionand can take account of the evident female labour supply heterogeneityacross two-parent families. If, after having children, someproportion of households substitute domestic for market laboursupply, the income and consumption variables used as the taxbase in most countries may be poorly correlated with livingstandards. Taxes and welfare programs based on these variablesmay increase inequality by shifting the overall tax burden tolow and middle wage families with both partners in work, awayfrom families with much higher wages and in which only one memberworks to earn the same joint market income. The paper combinesdata on time use, income, taxes and benefits to show how theytrack female labour supply over the life cycle, resulting inmuch higher tax burdens on two-earner households. (JEL D13,D91, H31, J22)     

Understanding Rising Income Inequality in Germany, 1999/2000–2005/2006

We examine the factors behind rising income inequality in Europe's most populous economy. From 1999/2000 to 2005/2006, Germany experienced an unprecedented rise in net equivalized income inequality and poverty. At the same time, unemployment rose to record levels, part‐time and marginal part‐time work grew, and there was evidence for a widening distribution of labor incomes. Other factors that possibly contributed to the rise in income inequality were changes in the tax and transfer system, changes in the household structure (in particular the rising share of single parent households), and changes in other socio‐economic characteristics (e.g., age or education). We address the question of which factors were the main drivers of the observed inequality increase. Our results suggest that the largest part of the increase was due to increasing inequality in labor incomes, but that changes in employment outcomes and changes in the tax system also contributed considerable shares. By contrast, changes in household structures and household characteristics, as well as changes in the transfer system only seem to have played a minor role.     

THE STRUCTURE OF THE EARNINGS DISTRIBUTION: HOW ARE HOUSEHOLDS AND INDIVIDUALS RELATED?*

This paper investigates the links between individual and household distributions of earnings. Using a sample of 1991 data from the UK, considerable complexity is uncovered in the structure of the household earnings distribution. This is due to heterogeneity of earners and positive ‘clustering’ of earners within households. The structure of the clustering behaviour of earners for different household types is estimated, and the contribution of clustering to overall earnings inequality is evaluated. Perhaps surprisingly in view of the observed clustering behaviour, it is found that clustering has reduced overall inequality, although the mean-adjusted distribution of individual earnings is insignificantly different from the distribution of household earnings.     

Poverty, inequality, and growth in urban China, 1986–2000

Although urban China has experienced spectacular income growth over the last two decades, increases in inequality, reduction in social welfare provision, deregulation of grain prices, and increases in income uncertainty in the 1990s have increased urban poverty. Using a large repeated cross section household survey from 1986 to 2000, this study maps the changes in income, inequality, and poverty over the fifteen-year period and investigates the determinants of poverty. We find that the increase in poverty in the 1990s is associated with the increase in the relative food price and the need to purchase items that were previously provided free or at highly subsidized prices by the state, i.e., education, housing and medical care. In addition, the increased saving rate of poor households, which is due to an increase in income uncertainty, contributes significantly to the increase in poverty measured in terms of expenditure. Journal of Comparative Economics 33 (4) (2005) 710–729.