The tyranny of non-aggregation versus the tyranny of aggregation in social choices: a real dilemma

Can a tiny gain to sufficiently many well-off justify imposing a much larger sacrifice on the worst-off? We show that if one answers negatively to such a question and endorses replication invariance, one is forced to accept the maximin principle and give full priority to the worst-off even when a tiny gain to the worst-off imposes a substantial sacrifice on arbitrarily many well-off. If one dislikes this consequence, one faces a real dilemma in choosing between the tyranny of aggregation and the tyranny of non-aggregation.     

Social Preferences in the Lab: A Comparison of Students and a Representative Population

We report from a lab experiment conducted with a sample of participants that is nationally representative for the adult population in Norway and two student samples (economics students and non‐economics students). The participants make choices both in a dictator game (a non‐strategic environment) and in a generalized trust game (a strategic environment). We find that the representative sample differs fundamentally from the student samples, both in the relative importance assigned to different moral motives (efficiency, equity, and reciprocity) and in the level of selfish behavior. It is also interesting to note that the gender effects observed in the student samples do not correspond to the gender effects observed in representative sample. Finally, whereas economics students behave less pro‐socially than non‐economics students, the two student groups are similar in the relative importance they assign to different moral motives.     

Pollution and the value of time

Some activities that cause pollution are undertaken by the consumers because they save time satisfying their needs that way instead of using similar but more time-consuming activities. Thus private transportation is used instead of public, one-way bottles are purchased instead of returnable, etc.Modern demand theory assigns a value (or rather opportunity cost) of time that is often related to the wage rate. This is used here and it has the consequence that the income distribution can be used to analyze the effect of various policy measures directed to reduce pollution. It is also shown how policy can be directed to influence time. The Kuhn-Tucker conditions are used to separate the customers into those that, depending upon income, buy e.g. one-way bottles and those that buy returnable ones.To illustrate the procedure some explicit examples of the effects of varying policy parameters such as taxes are shown.     

Lifetime versus Annual Tax‐and‐Transfer Progressivity: Sweden, 1968–2009

In this paper, we analyze the evolution of tax‐and‐transfer progressivity in Sweden over both annual and lifetime horizons. Using a rich micro panel covering the period 1968–2009, we calculate tax rates over a cohort's entire working life cycle. Our main finding is that taxes are considerably less progressive over the lifetime than in any single year. Social insurance transfers to transitory low‐income earners account for most of this result. We offer a number of robustness checks of the measurement of lifetime incomes and progressivity, but none of them changes our overall findings.     

Transfer und Preisbewegung

Ohne ZusammenfassungÜbersetzt von Oskar Morgenstern, Wien.     

Worker Absenteeism in Search Equilibrium*

In this paper we introduce a general equilibrium model of search unemployment that incorporates absence from work as a distinct labor force state. Absenteeism is driven by random shocks to the value of leisure that are private information to the workers. Firms maximize profits while recognizing that the compensation package may affect the queue of job applicants and the absence rate. The analysis provides results concerning the effects of social insurance benefits and other determinants of workers' and firms' behavior. The normative analysis identifies externalities associated with firm‐provided sick pay and examines the welfare implications of alternative policies.     

Responsibility for what? Fairness and individual responsibility

What should individuals be held responsible for? This is a fundamental question in much of the contemporary debate on distributive justice. Different fairness ideals, such as strict egalitarianism, and different versions of equal opportunity ethics and libertarianism give different answers to this question. In order to study the prevalence of these fairness ideals in society, we present the results from a dictator game where the distribution phase is preceded by a production phase. Each participant's contribution is a result of working time, productivity and price. We estimate what factors the participants hold each other responsible for and the weight they attach to fairness. In addition, we discuss how fairness preferences relate to business education and labour market experiences by comparing the estimates for business students at different stages of their education, and by comparing the estimates for final-year business students with the estimates for former business students with some years of work experience.     

Distribution theory and the Life-Cycle Hypothesis of saving

Using some general properties of ensembles of systems the size distribution of scarce resources in society is derived.Using Keynsian distribution theory and the Life-Cycle Hypothesis of saving the size distribution of income in society is determined.Specifically the distributive shares going to labor and capital are derived.It is shown that the results are consistent with empirical data.     

Income prospects and job mobility: The case of Sweden

The study has two interrelated objectives. The first one is to explore the role of expected wage gains for mobility decisions, the second to investigate the effects of mobility on subsequent earnings. The econometric analysis takes the interdependence between wages and mobility into account; wages are affected by mobility and mobility decisions respond to alternative prospective wages. The results show, among other things, that job movers in Sweden received an increase in real wage growth rates per year of 4 percent compared to a situation where they had not moved during the period 1968–1974. We also find some evidence that self-selection in the labor market is efficiency improving; the excess wage growth from job changing is higher for movers than for measurably similar stayers.