Does greater income inequality cause increased work hours? New evidence from high income economies

We explore the extent to which individual's allocation of time between labour and leisure is affected by the consumption standards of the rich. Utilizing a panel data methodology and panel Granger causality tests we investigate the relationship between income inequality and work hours for a cluster of 24 high-income OECD countries over the period 1990–2015. Four alternative measures of income inequality are considered. We find that greater income inequality is associated with longer work hours indicating stronger concern for conspicuous consumption rather than conspicuous leisure. Even though the resulting estimates lend support to the theoretical framework on consumption emulation, the generated evidence also appears to be in line with a Duesenberry's and Frank's expenditure cascading approach. The ambiguity however arising from the Granger Causality tests appears to lead – to a certain extent – to different conclusions about the direction of causality or whether a causal relationship does even exist. It is therefore imperative that caution should be exercised when interpreting the direction of the causal dimension.     

Explorations: Time-use surveys in the south

Abstract

Time-use surveys show how individuals spend their time during the day or week, which provides evidence of the gendered division of labor within households and the interdependence of women's and men's paid and unpaid work. Time-use experts in the South face similar challenges to those working in other countries, but they also have to come to terms with the restrictions faced in less developed contexts – notably higher illiteracy rates and limited statistical budgets. These Explorations bring together contributions from three experts on time-use survey design and administration working in three diverse Southern regions to highlight the ongoing processes of learning-by-doing and of building local expertise in these regions. Their discussion of methodological and logistical issues holds particular relevance for developing countries moving toward the implementation of time-use surveys. It also bears on more general feminist concerns regarding the classification and measurement of unpaid care.     

Causal Effects of Paternity Leave on Children and Parents

Reserving a share of the parental leave period for fathers is considered necessary in order to induce fathers to take leave, and to increase men's participation in child‐rearing. We investigate how a parental leave reform directed towards fathers affected leave‐taking, and, in turn, children's and parents' long‐term outcomes. A paternal leave quota greatly increases the share of men taking paternity leave. We find evidence that children's school performance improves as a result, particularly in families where the father has higher education than the mother. We find no evidence that paternity leave counters the traditional allocation of parents' labor supply.     

Making Visible the Hidden Economy: The Case for Gender-Impact Analysis of Economic Policy

This paper makes the case for analyzing the gender impact of economic policy, based on the existence of an unpaid as well as a paid economy and on structural differences between men's and women's positions across the two economies. Economic policy is targeted on the paid economy. However, unintended impacts on the unpaid care economy may limit how effective any policy can be. Gender-impact assessment will not only make the effects of economic policies on gender inequalities transparent; it will also enable policy makers to achieve all their goals more effectively, whether or not these goals relate explicitly to gender. The introduction in the UK of a new Working Families' Tax Credit (WFTC), designed to make employment pay and help reduce child poverty, provides an example of how gender-impact assessment could have been used to improve an initial policy design. The paper also suggests criteria for evaluating economic policy, so that its full gender impact and its effects on both paid and caring economies can be assessed.     

Gender,Work Burden,and Mental Health in Post-Reform China

ABSTRACT

This study investigates how total work burden, including paid work and unpaid care work, affects the mental health of prime-age, employed women and men in urban China. Based on the 2010 China Family Panel Studies (CFPS), regression results indicate that total work burden is negatively related to the mental health of both men and women, consistent with the idea that additional work hours reduce time available for rest and leisure. Women have longer working hours and are more likely to be time poor than men, and this gender inequality in total work burden contributes to the gender gap in mental health. The relationships between the components of total work burden – paid and unpaid work – and mental health shed further light on the strength of gender norms and the barriers to redistribution of unpaid work from women to men necessary to reduce the gender gap in mental health.     

Gender Patterns and Value of Unpaid Care Work: Findings From China's First Large‐Scale Time Use Survey

Using data from the 2008 China Time Use Survey, this paper examines the gender patterns of time allocation over paid work, unpaid care work, and non‐work activity and estimates the monetary value of unpaid care work. A seemingly unrelated regression (SUR) technique is applied to explore the tradeoff between the three types of activity. The estimates show that, holding constant individual characteristics and regional effects, the total work time of women is higher than that of men by 7 hours per week in the rural sector and by 10.5 hours per week in the urban sector. The monetary value of unpaid care work is estimated by five methods. Depending on the method used, the value assigned to unpaid care work varies from 25 to 32 percent of China's GDP, from 52 to 66 percent of final consumption, and from 63 to 80 percent of the gross products of tertiary industry.     

Fractionalization and the size of government

I study the effect of voters with a group-based social conscience. Voters care more about the well-being of those belonging to their own group than the rest of the population. Within a model of political tax determination, both fractionalization and group antagonism reduce the support for redistribution. Whereas within group inequality increases support for redistribution, inequality between groups has the opposite effect. These results hold even if a poor group forms a majority. Using a panel constructed from US micro data, I find support for the hypothesis that within race inequality increases redistribution while between race inequality decreases redistribution.     

Gender Gaps in Unpaid Domestic and Care Work: Putting The Pandemic in (a Life Course) Perspective

Our paper examines  trends in gender inequalities in unpaid domestic and care work over the short- and long-term in Australia, including assessing the impact of the COVID-19 lockdowns. We use the concept of time—historical, biographical and transitional—as a framework for our analyses. Drawing on data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, we find wide and continuing gender gaps in unpaid work over the past two decades. We demonstrate that parenthood is a far greater producer and exacerbator of gender inequalities in unpaid domestic and care work than COVID-19 lockdowns.     

Is Racial Exclusion Gendered? The Role of Residential Segregation in the Employment Status of Black Women and Men in the US

This paper explores one angle of the race/gender/class intersection by examining the effect of residential segregation on black women and men's employment status in the US. Do the exclusionary mechanisms embedded in racially-based residential segregation affect black women and men's economic outcomes similarly, or are their employment outcomes differentiated by their different gender statuses? This paper lays out a theoretical framework for understanding the role residential segregation may play in shaping black men and women's labor market outcomes, outlining key mechanisms that link residential segregation to labor market inequality, highlighting the ways in which many of these mechanisms are gendered as well as racialized. This paper also offers an analytic design to test the hypotheses developed in this exploration.     

Unpaid Care Work's Interference with Paid Work and the Gender Earnings Gap in China

This paper examines the effects of unpaid care work on the earnings of men and women in China by using data from the 2008 China Time Use Survey, the country's first, large-scale time-use survey. The study introduces three indicators to measure the degree to which unpaid care work may “interfere” with paid work, either by directly disrupting it or by being intertwined with it. The regression estimates show that while the amount of time spent on unpaid care work negatively affects the earnings of both men and women, the interference of unpaid work with paid work lowers earnings more for women than for men. Quantitatively, the gender differences in the time spent on unpaid care work and its interference with paid work account for 28 percent of the gender earnings gap in China.     

Income Taxation and the Diversity of Consumer Goods: A Political Economy Approach*

After‐tax income inequality has risen since the mid‐1990s, as increases in market income inequality have not been offset by greater fiscal redistribution. We argue that the substantial increase in the diversity of consumer goods has mitigated mounting political pressures for redistribution. Within a probabilistic voting framework, we demonstrate that if the share of diversified goods in the consumption bundle increases sufficiently with income, then an increase in goods diversity can reduce the political equilibrium tax rate. Focusing on OECD countries, we find empirical support for both the model's micro‐political foundations and the implied relation between goods diversity and fiscal policy outcomes.     

The relationship between income inequality and aggregate saving: an empirical analysis using cross-country panel data

If the rich save more than the poor, an increase in income inequality raises aggregate saving. We investigate whether income inequality is positively related to aggregate saving ratio by estimating a fixed-effect model based on a panel data of 48 countries for the period 1991–2010. We find evidence that aggregate saving ratio increases with income inequality using various inequality measures. In particular, the effect of income distribution on saving is greater and statistically more significant with in financially developed, rich and OECD countries. It suggests that the rich save much more than the poor under advanced financial system and in a rich country. We also find that the relationship between income inequality and saving ratio is closer in the 2000s than the 1990s. This finding may result from financial development and the high income level in the 2000s.     

The First World/Third Party Criterion: A Feminist Critique of Production Boundaries in Economics

This paper examines definitions of production boundaries in economics, explores the limitations of these definitions with respect to the inclusion of unpaid domestic labor, and considers the significance of such an exploration for feminist economic analysis. Margaret Reid's ''third party criterion,'' a definition of economic activity advocated by many feminists and one used to set the production boundary for most household production models, sets an implicit market standard for defining nonmarket economic activity and therefore contributes to the marginalization of such production. Similarly, production boundaries considered appropriate in third world contexts, such as those defined in the recently revised System of National Accounts, also use implicit market standards for defining nonmarket economic activity. A ''first world'' criterion implicit in such production boundaries defines nonmarket activity as work only if it would have been dealt with on the market in the first world; this results in the inclusion of some of the unpaid domestic activity of rural women on grounds which reinforce the exclusion of work such as child care and the preparation of meals in theory and policy. Feminist economists should beware the danger of recreating implicit assumptions and definitions which result in the exclusion of unpaid domestic labor.     

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.     

EDUCATIONAL GENDER INEQUALITY AND INVERTED U‐SHAPED FERTILITY DYNAMICS*

In this article, we examine the dynamic interactions between narrowing educational gender inequality and inverted U‐shaped fertility dynamics by constructing a two‐period overlapping generations model that includes both sexes. In the early stage of development, neither male subjects nor female subjects are educated. At some period, male subjects begin to be educated, whereas female subjects remain uneducated. At this stage, the male subjects' education levels, as well as the fertility rates, gradually increase over time. Fertility achieves a peak just before the onset of the female subject's education. Subsequently, fertility steadily decreases over time. Gender inequality in education also decreases during periods of fertility decline.     

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.     

Does income inequality increase marginal propensity to consume?

This article empirically investigates the effects of income inequality on the marginal propensity to consume (MPC), using panel data of 22 OECD countries over the period 1994–2015. We find that MPC increases dramatically as income inequality increases. In subsample analyses, the MPC of a high inequality group is more than twice that of a low inequality group.     

Unequal opportunities and public policy: The impact of parental disability benefits on child postsecondary attendance

This paper uses Canada's National Longitudinal Survey of Children and Youth to examine whether greater cash transfers available to parents with disabilities when their child was aged 5 to 15 increase the chances that the child will attend postsecondary education (PSE) as a young adult. We exploit differences across provinces and over time in the generosity of provincial disability benefits programs in Canada and find that higher disability benefits when the child was aged 5 to 15 years increase the probability that he or she will have attended or be attending PSE by age 19 to 25. The estimated effect size increases with the severity of the parental disability and the number of disabled parents. Because lower disability benefits significantly worsen performance of public school aged children on standardized math tests and elevate anxiety symptoms, one plausible pathway from disability benefit levels to PSE attendance may be through the cognitive and non‐cognitive skills children acquire by the age of 15. We conclude that the level of disability transfers available early in a child's life mitigates the impact of having a parent with a disability as a source of inequality of opportunity and of unequal probability of PSE participation.     

Rural credit and the time allocation of agricultural households: The case of PRONAF in Brazil

This paper evaluates the impact of Brazil's National Program to Strengthen Family Farming (PRONAF) on the time allocation of household members. We use data from the 2014 Pesquisa Nacional por Amostra de Domicílios, and we apply propensity score methods to complex surveys recently recommended in the literature. We find that PRONAF helps to increase focus on agricultural activities, but it also stimulates female partners to engage in unpaid work. The results show significant effects of PRONAF on child labor and on the gender‐specific division of labor within households, although it does not have the usual adverse effects of rural credit programs on school attendance.