Welfare comparisons of income distributions and family size: An individualistic approach

We investigate the problem of how to perform comparisons of income distributions across families of different sizes. We argue that social welfare ought to be computed as the average individual utility instead of the average household utility as in most known criteria. We provide dominance criteria which allow for some indeterminacy about the average optimal family size, by resorting to the bounded approach to dominance analysis proposed by Fleurbaey et al. (2003). Indeed, when differences in needs come from family size, a specific population allocation problem (how a population should be optimally divided over families for given resources) adds to the usual income allocation problem. Pro-family and anti-family stances are introduced in order to make explicit the choice of an optimal family size. An application to French data shows that shifting from the household to the individualistic point of view can substantially alter the outlook of dominance results.     

INTRAHOUSEHOLD INEQUALITY AT DIFFERENT WELFARE LEVELS: ENERGY INTAKE AND ENERGY EXPENDITURE DATA FROM THE PHILIPPINES*

ABSTRACTS This paper investigates the relationship between intrahousehold inequality and levels of household welfare. Under certain conditions it is demonstrated — with both the unitary model of the household and with some collective models — that the relationship between household welfare and inequality within the household can have an inverted u-shape. Using two sets of calorie adequacy data from a sample of 455 households in the Philippines, a spline analysis is used to test the hypothesis that inequality within the household first increases and then decreases as per capita household total expenditure increases. The two sets of calorie adequacy data are based on repeated 24- hour recalls of dietary intake, and on calorie requirements that are unadjusted and then adjusted for individual activity patterns. Results indicate that once activity patterns are accounted for, calorie intake shortfalls are borne fairly equally within the household at all per capita household total expenditure levels.     

Optimal density of radial major roads in a two-dimensional monocentric city with endogenous residential distribution and housing prices

This paper proposes an analytical urban system equilibrium model for optimizing the density of radial major roads in a two-dimensional monocentric city. The proposed model involves four types of agents: local authorities, property developers, households and household workers (i.e. commuters). The local authorities aim to maximize the total social welfare of the urban system by determining the optimal density of radial major roads in the city. The property developers seek to determine the intensity of their capital investment in the land market to maximize the net profit generated from the housing supply. The households choose residential locations that maximize their utility within a budget constraint, and the commuters choose the radial major roads that minimize their individual costs of travel between home and workplace. A heuristic solution procedure is developed to find the urban system equilibrium solution. A system optimum model is also proposed to optimize the density of radial major roads that maximizes the social welfare of the urban system. The proposed model can endogenously determine household residential distribution and land values across the city, along with the housing market structure in terms of housing prices and space. Numerical comparative static analyses of congestion pricing and road infrastructure investment (adding a new radial major road) are carried out together with evaluation of the effects of the service level of radial major roads, urban population size, and household income level on the urban economy.     

Rent Subsidy and Housing Satisfaction The Case of Urban Renewal In Lubbock, Texas

—Governmental programs proposing rental supplements for low-income families assume that social and economic conditions of these families may be improved by such subsidy. However, this assumption has not been adequately tested by social science research. Data presented here were gathered at an urban renewal relocation housing project in Lubbock, Texas, and suggest that when families who, before urban renewal, were self-sufficient in slum housing are forced into welfare situations because of rent subsidy programs, dissatisfaction with relocation facilities results. The data also indicate that dissatisfaction is correlated positively with the number of persons in the household, the age of residents, and socioeconomic status.     

Money,random matching and endogenous growth: A quantitative analysis

In this study, we develop a search-and-matching monetary growth model to analyze the effects of inflation on economic growth and social welfare by introducing endogenous economic growth via capital externality into a two-sector search-and-matching model. We find that the channel through which inflation affects economic growth in the search-and-matching model is different from the traditional cash-in-advance model. To facilitate the calibration, we obtain an empirical estimate of the effects of inflation on economic growth using panel regressions. In the simulation analysis, we quantitatively evaluate the welfare effect of inflation in the search-and-matching endogenous growth model and compare it to a search-and-matching exogenous growth model. We find that the welfare effect of inflation is nonlinear in the endogenous growth model whereas it is linear in the exogenous growth model. Furthermore, we find that the welfare cost of inflation under endogenous growth is up to four times as large as the welfare cost of inflation under exogenous growth.     

Industrial development and social welfare: A case study of Iran

Nowadays, monitoring and evaluation of social welfare are of profound import in many countries. This study sought to shed some light on the impact of industrial development on the Iranian social welfare. The Iranian Social Welfare Composite Index (SWCI) and Sen Welfare index (SEN) considered as proxies of Iranian social welfare. To gauge the impact of industrialization on social welfare, Autoregressive Distributed Lags (ARDL) bound testing was utilized. The econometric models estimated using annual data from 1967 to 2015 and presented in terms of long-run and short-run dynamic relationships. The results indicate that industrial development had a significant impact on the Iranian social welfare and this impact has been stronger in the long run. In addition, oil revenues, inflation, unemployment and the Iraq-Iran War have had a significant impact on the Iranian social welfare during the period under review. Despite the contradictory impact of industrialization on the various dimensions of welfare, the results show that the industrial development has had a positive impact on the social welfare in Iran. So, the government can boost the effects of industrialization on social welfare by controlling its negative effects.     

Trade Liberalization and Poverty in Ecuador: A CGE Macro-Microsimulation Analysis

Cross-country analysis of the aggregate growth-poverty link is likely to miss important country-specific detail and possible offsetting forces in the underlying labour market adjustment process. This paper combines a CGE model analysis with a microsimulations approach to analyse the effects of trade liberalization on poverty and income distribution in Ecuador. The CGE model enables us to disentangle the general equilibrium effects of various trade policy scenarios on sector output, employment, factor incomes and household consumption. However, as is typical of CGE models, this analysis only provides distribution results for fairly aggregated groups of workers and a reduced number of representative households. The microsimulations approach adds the full distribution to the analysis and allows simulation of the effects of trade reform on the job status and remuneration of individual workers and thereby on household income distribution and poverty. The macro- microsimulation results indicate that the trade opening in Ecuador induced mild aggregate welfare gains, but rising income inequality due to rising wage differentials between skilled and unskilled workers implies virtually no poverty-reducing effect from trade liberalization.     

Volatility risk and economic welfare

This paper examines the effects of time-varying volatility on welfare. I construct a tractable endogenous growth model with recursive preferences, stochastic volatility, and capital adjustment costs. The model shows that a rise in volatility can decelerate growth in the absence of any level shocks. In contrast to level risk, which is always welfare reducing for a risk-averse household, volatility risk can increase or decrease welfare, depending on model parameters. When calibrated to U.S. data, the model finds that the welfare cost of volatility risk is largely negligible under plausible model parameterizations.     

Social security and two-earner households

In the past decades, elimination of the pay-as-you-go system in U.S. has been extensively discussed and studied. Such an elimination would also eliminate the intragenerational redistribution done by the following policies of social security. Due to spousal and survivor׳s benefit provisions, US Social Security system redistributes (mostly) to single-earner married households. Since retirement benefits are a concave function of past mean earnings, the system redistributes from high earners to low earners. Finally, existence of a cap on social security taxable earnings makes the system regressive. This paper quantifies redistributive, labor supply, and welfare implications of these policies using a general equilibrium life-cycle model. Agents start out as permanently married or single and with education levels and wage profiles, where the latter depend both on education and gender. The household is the decision maker and decides on labor supply of its member(s) and saving. Elimination of these policies results in a 5.5% rise in labor force participation of married females, while increasing aggregate welfare by 0.4%. A majority of households experience positive gains in welfare. Single-earner married households incur large welfare losses (as big as 1.1%), whereas two-earner households with high skilled spouses experience substantial welfare gains (as big as 1.9%).     

住房价格、社会保障支出和居民消费——基于面板门槛模型的实证分析

党的十九大报告提出了改善住房制度、加强社会保障和完善消费体制等一系列要求,这些热点问题之间不是孤立的,而是存在着内在的联系。为此,基于不确定性视角,将社会保障支出水平纳入分析框架研究发现,住房价格上涨通过社会保障支出对居民消费产生正向影响,与原有住房价格通过收入视角对居民消费产生的效应相叠加,使住房价格对居民消费产生的总效应呈现非线性关系。在此基础上,以地方政府社会保障支出水平作为门槛变量,建立关于房价和居民消费率关系的面板门槛模型,以我国2007—2015年省际面板数据为样本进行实证分析,结果表明：社会保障水平的变化使得住房价格对于居民消费率的影响存在显著的单门槛效应。当社会保障支出水平小于其门槛值时,住房价格上涨对居民消费率有较强的抑制效应,两者之间呈现显著的负相关关系;当社会保障水平超过门槛值后,住房价格上涨对居民消费率的抑制效应明显减弱。     

Assisted Housing and the Educational Attainment of Children

This paper examines the long-term effects of assisted housing on the educational attainment of children. It is based on unique data, the Panel Study of Income Dynamics (PSID)-Assisted Housing Database, in which we have matched addresses of all PSID sample members to addresses of federal and state assisted housing. Using a two-stage instrumental variable approach, the inferior educational outcomes of children who live in public housing disappear when measured characteristics are taken into account, while unmeasured characteristics have insignificant effects. We also find neither positive nor negative effects of privately owned assisted housing. These findings are similar to those on the effects of other social welfare programs.     

Leveraging the social welfare chain to provide resilience during disaster

Due to the rampant increase in disasters globally, resilience in supply chain and logistics is receiving greater research attention in various parts of the world. This paper considers the role and contribution of social welfare supply chains in providing resilience. This is a causal phenomenon which has been studied through an exploratory research by building a framework from extant literature, a case study on an Indian non-governmental organization and tested through a social network analysis. We show how in the wake of a disaster, these social welfare supply chains become enablers. The paper provides an inkling into how to improve community resilience in times of disaster. Further, we show how these supply chains use social cohesion embedded in the structure to provide efficiency, diversity and adaptability, thereby bringing resilience into the supply system. Another contribution of this study is the use of visualisation and analysis of social media representation tools for social network analysis in operations.     

Future changes in age and household patterns: Some implications for public finances

Using stochastic forecasting techniques, this paper assesses the consequences for public finances of changes in age and household structures in Denmark over the period 2008–2037. Focusing on components of welfare provisions and tax payments with noticeable differences across age and household status, we show that, based on a point forecast, the fiscal impact of changes in household structures amounts to an annual negative effect of 0.5% of GDP, and the effect of changes in age structures is forecast to worsen the public budget by 3.7% of GDP per year. While being subject to a considerable amount of uncertainty, the prospect of such a dramatic weakening of public finances is likely to trigger demands for welfare reforms characterized by a more individualized system of public transfer and tax payments, in addition to the measures that have already been taken to address the fiscal effects of population ageing.     

On the role of labor supply for the optimal size of Social Security

The paper studies the welfare effects of a Social Security system in a stylized overlapping generations economy with random production and capital accumulation. Different welfare concepts including long run optimality, social optimality, and time consistency are employed to determine the optimal size of the system. When labor supply is exogenous, a unique contribution level can be identified which is optimal according to all three concepts. When labor supply is endogenous, however, this result generically fails to hold and the long-run optimal solution is only constrained socially optimal while the time-consistent policy may even lead to an inefficient equilibrium.     

The Diversity and Causality of Welfare State Reforms Explored with Fuzzy-Sets

The introduction of fuzzy-sets into social science has potentially improved our ability to study diversity by means of the so-called partial memberships. As a consequence, social phenomena can be studied empirically as a matter of degree and not longer as fixed types. A fuzzy-set is a set with elements whose membership grades can have any real value between 0 and 1. In order to illustrate the capacities of the fuzzy set logic and also to make the discussion less abstract, it will be applied to the study of welfare state reforms. The ‘grading capacity’ of fuzzy-sets makes it possible to study welfare states as partial members of different welfare state regimes at the same time. This approach reveals the diversity of welfare reforms better than traditional ways which are often inclined to picture a case as representative of one particular type which is a too crude classification. Fuzzy-sets are designed to capture the diversity in a way that leaves more room to map individual cases without falling into the trap of idiosyncrasy. An equally important ability of fuzzy-sets is to analyse causal relationships in a small-n design. The fuzzy-set logic can be used to determine necessary and sufficient conditions for an outcome. This takes the form of expressions which reveal multiple-conjunctural causation patterns. In this paper the conditions for welfare cutbacks and the effects on socio-economic performance will be examined.     

RECENT DEVELOPMENTS IN CONSUMER CREDIT AND DEFAULT LITERATURE

This survey discusses recent contributions to the quantitative literature on unsecured consumer debt and default, and some ongoing challenges for the literature. Key topics include the sources of the rise in personal bankruptcies, the importance of asymmetric information and the effects of developments in information technologies on consumer credit markets, delinquency and informal bankruptcy, debt collection and restructuring of distressed debt, the cyclical behavior of consumer debt and default, and the insurance role of household debt. Implications for welfare analysis and policy design are discussed. Several theoretical contributions and approaches to modeling the consumer credit markets are also highlighted.     

Child Welfare Allocations: State-level Estimates of Effective Guarantees

Welfare grants in the United States very from year to year and from state to state. Actual grants are very different from stated nominal levels of support for two reasons. First, grants are reduced for income. Second, not all qualified families receive welfare. Some do not apply. Others are discouraged, wrongly denied, or poorly counselled. The actual level of welfare support per child is estimated herein at the state level for single female household heads for each year from 1979 to 1990. A tobit estimation technique is employed to account for the probability of not receiving welfare when otherwise qualified.     

An empirical welfare approach to regional income distributions: Alternative specifications and estimates of income inequality measures

The paper attempts to develop a welfare theoretical approach to the analysis and comparison of regional income differences. Three types of alternative methods are discussed, viz. (a) an a priori method of inserting parameter values in a prespecified welfare function, (b) an ex post method of deriving parameter values of a welfare function on the basis of income statistics and (c) a canonical correlation analysis on the basis of a set of underlying explanatory variables. All these three methods are used to define an income inequality measure appropriate for interregional comparisons. The methods employed are illustrated by means of empirical applications to regional income statistics in the Netherlands.     

The bounded welfare pluralism: public–private partnerships under social management in China

This article discusses a new public–private partnership promoted by an emerging social management agenda in China. Based on an analysis of recent developments in social policy, the present study suggests that the inherent logic and local practice of social management has crowded out the space for societal sectors despite the proclaimed recognition of their social contribution. The collaboration of public and private entities in welfare provision by social management may end up merely co-opting civic organizations into taking responsibility for meeting welfare targets over which they have scant influence, while providing little support for them to thrive and prosper.     

Auto pollution and congestion in an urban model: An analysis of alternative strategies

Congestion and pollution externalities associated with automobile driving are examined for their effect on urban structure. A monocentric urban model which incorporates household preferences for both an unpolluted environment and for leisure time is presented, and used to evaluate alternative pricing and emissions policies on automobile use and their effects on city structure. Optimal tax gradients for driving are derived, and compared with second best cases of per mile taxes and no taxes. As externalities gradients become more nonlinear, the welfare gains from employing optimal taxes rather than a per mile tax are increased. The appropriate choices of an emission standard, highway capacity, and highway pricing policy must be made simultaneously and depend on household preferences.