Competition and the cost of health care

Previous studies of the underreporting of income for tax purposes have used private employees as the benchmark to which other groups’ compliance was measured. In this paper it is suggested that there are a number of circumstances when there will be an incentive for private employees and their employers to collude to understate employee wages and salaries for purposes of taxation. The existence of high marginal tax rates of income tax combined with high social security payroll taxes are the typical conditions that stimulate this behaviour. These conditions are present in North Cyprus. This paper examines a rich source of household consumption expenditure and income data for North Cyprus that allows one to separate out the consumption expenditures made by the self-employed, private employees and civil servants over specific periods of time. From the comparison of consumption expenditures on food by these three groups it is possible to estimate how much self-employed and the private employees understated their incomes as compared to the civil servants. It is found that in North Cyprus private employees understate their incomes by approximately the same proportion of their incomes as do the self-employed.     

A macroeconomic approach to the income-tax work-effort relationship

In this paper, we analyse the dynamic relationship between hours worked per employee (per self-employed) and marginal income tax-rate shocks in terms of both a comparative-dynamics model and a stochastic general equilibrium econometric model. The econometric model is estimated for Germany, UK and USA over the post-1960 period using the GMM estimation technique. Estimates in both models show that increases in the marginal income-tax rate exert negative effects on hours worked by both employees and the self-employed, but the response of the employees who are subject to tax withholding is stronger than the response of the self-employed.     

The Corporate State,Economic Performance,and Social Policy

We use the Survey of Consumer Finances to analyze changes in U.S. household debt between 1989 and 2013. We focus on how income and debt levels have changed, and what this means for future economic growth and living standards. Prior to the Great Recession, U.S. households had record high debt levels and record low savings rates. Highly leveraged consumption boosted economic growth. However, large debt burdens have led many families to deleverage. Our study finds that deleveraging has been insufficient. Although debt payments have fallen relative to household income, this is mainly due to low interest rates. Debt levels, especially for home mortgages, remain high by historical standards and portend continued stagnation due to lower consumer spending.     

Internet usage and the income gap between self-employed individuals and employees: Evidence from China

Using longitudinal data from the China Family Panel Studies, we investigate the impact of Internet usage on the income gap between self-employed individuals and employees in China, considering the sample selection bias and individual heterogeneity issues. We divided employment statuses into three types―small entrepreneur, own-account worker, and employee. The findings reveal the following: First, the returns from Internet usage differ by employment type, which is lower for self-employed individuals than that for employees. Second, the difference in Internet usage contributes to widening the income gap, whereas the difference in the returns from Internet usage to income contributes to narrowing it. Finally, Internet usage exerts a greater impact on the income gap between employees and small entrepreneurs than that between employees and own-account workers. These empirical results suggest that the division of Internet access may exacerbate the segmentation of the formal and informal sectors in China.     

Income splitting among the self-employed

Abstract .  Under individual taxation with progressive marginal tax rates, households in which the distribution of income is unequal benefit from attributing income to the lower income household member. Self-employment provides greater potential to 'split' income in this way because of the absence of a third party reporting income. Using the Canadian experience as a case study, this paper develops a unique estimator of the incidence of illegal income splitting among self-employed couples. The results suggest that the incidence of income splitting among self-employed men in Canada is non-trivial; but no evidence is found that self-employed women attribute income to their spouses.     

Funding self-employment – the role of consumer credit

This article investigates whether self-employed households use consumer loans – in particular, instalment loans and overdrafts – to finance business activities. Controlling for financial and nonfinancial household variables, we show that self-employed households particularly use personal overdrafts significantly more often than employee households. When analysing the correlation between consumer loan take-ups and consumption of self-employed in comparison to employee households, we find first evidence that overdrafts are used by self-employed to finance their business as well. This indicates that intermingling constitutes a financing strategy when regular business loans might not be accessible.     

SAVINGS AND PERSONAL DISCOUNT RATES IN A MATCHED SAVINGS PROGRAM FOR LOW‐INCOME FAMILIES

The ability to save for future needs is critical to family well‐being and is especially challenging for low‐income families with little extra income and limited access to institutional structures like employment‐based retirement funds or low cost savings mechanisms. Many nonprofits and governments have created new savings vehicles to fill this void. The ability of families to succeed in these programs may depend on their personal discount rates (time preferences). In this paper, we use survey data from a matched savings program and factor analysis to characterize family time preferences in order to predict their influence on savings levels. We find that a single latent factor describing the level of discount rates (rather than other dimensions of time or amount inconsistency) best describes family differences and is significantly related to the ability of families to save within the program. (JEL D91, I30)     

Parental Wealth and the Black–White Mobility Gap in the U.S.

Utilizing longitudinal data from the Panel Study of Income Dynamics (PSID), this paper examines the relationship between parental wealth and intergenerational income mobility for black and white families. I find that total parental wealth is positively associated with upward mobility for low‐income white families, but is not associated with reduced likelihood of downward mobility for white families from the top half of the income distribution. Conversely, I find that total parental wealth does not have the same positive association for low‐income black families, while home ownership may have negative associations with the likelihood of upward mobility for these families. However, for black families from the top half of the income distribution, home equity is associated with a decreased likelihood of downward mobility, suggesting a heterogeneous relationship between home ownership and mobility for black families.     

The management function of entrepreneurs and countries’ productivity growth

This article examines the determinants of the equilibrium number of entrepreneurs and the level of productivity in economies where individuals make occupational choices between being self-employed or working as an employee. The results of the theoretical model explain some observed empirical regularities, such as the negative association between productivity and self-employment rates in cross-country data. The article also derives and empirically tests an unexplored relationship between entrepreneurship and economic growth, in the form of a positive association between productivity growth in t and the proportion of the self-employed in t???1, providing a new perspective on cross-country productivity convergence over time.     

Challenges in Measuring Poverty and Understanding its Dynamics: A South Asian Perspective

South Asia’s success at reducing poverty does not imply that the topic has become passé. Poverty rates are by now low, but this is because poverty lines are low as well. And the assessment of living standards and their dynamics are blurred by measurement and interpretation challenges. This paper relies mostly on South Asian examples to highlight four tensions: poorer versus richer households, rural versus urban locations, monetary versus non‐monetary dimensions of wellbeing, and household characteristics versus context. The discussion is conducted against the backdrop of the two analytical approaches with South Asian roots that have shaped the debate for decades. This review leads to three main recommendations: household survey data has to be exploited in a more thorough manner, data that is increasingly available from other sources needs to be incorporated more systematically in the analysis, and the multiple dimensions of wellbeing should be better integrated in a common framework.     

When is your experience valuable? Occupation-industry transitions and self-employment success

The literature on employee spinoffs has, for a long time, stressed the importance of industry-specific skills and experiences in explaining the success of new firms. We argue that employees also develop skills that are associated with their occupation within an industry, and that success as an entrepreneur, therefore, is also contingent on the relation between the entrepreneurs’ previous occupation and the industry in which they operate as self-employed. Using matched employer-employee data, we develop a measure, occupational spin-offs, that accounts for this relation. An occupational spin-off is defined as a start-up in the most common industry, given the previous occupation of the founder. We then show that entrepreneurs starting occupational spinoffs enjoy above average income from self-employment and have longer spells as business owners.     

Measuring the Labor Income Share of Developing Countries: Lessons From Social Accounting Matrices

This paper addresses the challenges of measuring the labor income share of developing countries. The poor availability and reliability of national account data as well as the fact that self-employed—whose labor income is hard to capture—account for a major share of the workforce and often work in the informal sector render its computation difficult. Consequently, measuring the labor share requires assumptions. I consult social accounting matrices in addition to national account data to gain information on the production structure and self-employed incomes in developing countries. The final data set covers about 90 developing countries from 1990 to 2011. The data suggest that the finding of declining labor shares of previous studies also applies to the sample of low and middle-income countries. Furthermore, I find the labor share in developing countries to be about one-half in size and hence less than the standard “two-thirds” in economic literature.     

Toward an Improved Definition of the Wealthy*

A definition of the wealthy was proposed in this journal [Eisenhauer, J. G. (2008). An economic definition of the middle class. Forum for Social Economics, 37, 103–113]. According to the definition, “the wealthy” are people who could live poorly for a year while living off the interest on their wealth. This paper suggests a more general definition of the wealthy, which encompasses that definition as well as ones based on the ability to live at higher standards of living than the poverty level over longer periods of time than one year while living off interest income alone. Previous empirical work is revisited to show new insights offered by the new definition. The evidence points to the reemergence of a rentier class.     

What principles should inform poverty indices? Insights from a cross-country survey

1,392 undergraduate students from Bolivia, Brazil, France, Italy, Kenya, Laos, Switzerland and the UK are involved in a survey exploring the support for customary poverty measurement principles. Our study allows us to enhance the studies of Amiel and Cowell (Empir Econ 22:571–588, 1997; The distribution of welfare & household production. International perspectives, 1998) in a variety of directions. We find that the support for Weak Monotonicity crucially depends on whether the poor income rises or falls and the (generally low) agreement with Regressive Transfer is even lower if the recipient is lifted out of poverty as a consequence of the transfer. Further, the support for a certain poverty axiom can significantly differ according to the characteristics of the income distributions to be compared, as is the case for Population Replication and Poverty Growth when, respectively, the society to be replicated and the poor person added to society are very poor ones. Our results also suggest a certain concern for the poorest in society and cast doubts on the desirability of continuity at the poverty line. Finally, notable heterogeneity emerges across relevant subgroups. Poverty perceptions are significantly different for students living in high- and low-income countries: the latter more strongly support Weak Monotonicity and Regressive Transfer, unveiling a more pronounced sensitivity to lower levels of poor incomes. Interesting differences, though less marked, are also found between the views of economics students and those of their colleagues from other disciplines.     

The role of gender and its potential channels to affect self-employment in Taiwan

This research investigates the gender differences in the self-employment sector by employing a dynamic panel model with county- and city-level data from 1998 to 2016 in Taiwan. Our study is distinct from most others in this issue in that we explore not only the inter-gender difference, but also the intra-gender differences in self-employment. Following this framework, we first find that women are on average less likely to self-employ than men, and further find that older men, married men, men living in lower income regions and women living in higher income regions are more likely to become self-employed compared to their respective reference groups. We thus argue that gender influences self-employment not only directly but also through interactions with other demographic variables. Separate evaluation of different groups based on demographics should therefore result in better targeting of policies.     

欠发达地区农村居民最低生活保障制度研究——安徽省农村最低生活保障调查

最低生活保障制度是政府对家庭人均收入低于最低生活保障标准的贫困人口进行救助的一种新型社会救助制度,本文以安徽省部分贫困县农村最低生活保障实施情况调研资料为基础,对欠发达地区农村居民最低生活保障制度的建立与实施作深层次剖析。并针对在执行过程中的具体困难,明确各级政府在这项工作中的责任。     

中国地区居民生活水平比较——基于全球夜间灯光数据

当衡量一国或地区居民生活水平时,统计学上一般有收入和消费两种视角。本文利用城乡住户调查中的人均可支配收入和国民经济核算中的居民消费水平,以全球夜间灯光数据为参照,综合收入端与消费端信息,对1997—2016年中国31个地区的真实生活水平进行比较分析。研究证实,灯光亮度与消费水平和人均可支配收入之间均存在显著的线性关系,可以用来估算真实生活水平。根据不同模型的回归结果得到,真实生活水平的最优无偏估计中消费水平的权重范围为（2795%,3831%）,人均可支配收入水平的权重范围为（6169%,7205%）。相对于消费水平,人均可支配收入更能准确地反映真实生活水平。本文进一步分析发现,样本期内居民生活水平增速小于人均GDP增速,可见经济的发展并未完全转化为生活水平的提高。中西部地区与东部地区的生活水平仍然存在巨大差距,东部地区的平均生活水平分别是中部和西部地区的17倍和21倍。     

The Impact of Health, Education and Housing Outlays upon Income Distribution in Australia in the 1990s

The distributional impact of public expenditure on such programs as health, education and housing is frequently ignored in studies of income distribution. This may bias assessment of both the relative living standards of different types of families at any particular point in time and of trends in income inequality over time. This article provides estimates for the 1990s of the combined distributional impact of public outlays on health, education and housing. The analysis indicates that the major beneficiaries of public outlays on these services are families with children and the aged. The pattern of receipt shows a strong life-cycle effect, with the value of non-cash benefits peaking in the 30s and 40s and rising again in retirement. Non-cash benefits are also shown to have an equalising effect upon income distribution.     

MEASURING INEQUALITIES: DO HOUSEHOLD SURVEYS PAINT A REALISTIC PICTURE?

The paper addresses the issue of the accuracy of standard‐of‐living measurements using household survey data. First, it highlights the fact that lighter data collection processes in some developing countries have added to measurement errors in consumption and income aggregates measurement errors. The paper reasserts the need to apply reference guidelines to the measurement of household consumption in order to compute comparable distribution indicators across countries and over time. Second, it contends that it is hard to analyze inequality solely from consumption patterns without taking income and savings into account. Two solutions are proposed for the correction of income measurement errors: by using savings declarations and by implementing a multiple imputation procedure. The results are based on a careful analysis of the EPM93 survey of Madagascar whose design is quite close to the LSMS household surveys, and the ENV98 survey of Côte d'Ivoire representative of surveys conducted nowadays in most Sub‐Saharan African countries.     

The Distribution of Economic Well-being in Urban Russia at the End of the Soviet Era

Assessing the extent of inequality and how various groups in the population were faring in the former Soviet Union is difficult. There are conceptual problems and severe data limitations. Here we analyse the distribution at the household level using unique microdata. The sample was collected for the Russian city Taganrog in 1989. We portray inequality in equivalent income terms, investigate income packaging, decompose inequality by population subgroups and relate equivalent income to household characteristics. The results indicate that inequality in living standards for urban Russia was small, but not extremely small. Public sector transfers and income taxes played a smaller role than in several advanced Western countries. The income situation of a household in the former Soviet Union was very strongly linked to its work efforts and dependency burden. Thus, aged persons and families with a newborn child were much worse off than people of active ages. Persons in households with a female head had considerably lower income than those with male head of households. The results also shows a clear positive relation between length of education and living-standard.