MEASURING THE IMPACT OF VALUING HEALTH INSURANCE ON LEVELS AND TRENDS IN INEQUALITY AND HOW THE AFFORDABLE CARE ACT OF 2010 COULD AFFECT THEM

A substantial part of the U.S. inequality literature focuses on yearly levels and trends in pre‐tax, post‐transfer cash income and its distribution over time and finds that median income appears to be stagnating, with income growth primarily coming at higher income levels. When we use data from the Current Population Survey for 1995–2008 and add the value of employer‐ and government‐provided health insurance coverage, not only does it increase the upward trend in the level of resources controlled by Americans, but also reduces the level of inequality in these resources and its upward trend. We then provide a highly stylized example of this broader income measure's value in capturing the impact of two key provisions of the Affordable Care Act of 2010—an expansion in Medicaid and the provision of subsidies to lower‐income families for purchasing private coverage on state‐run exchanges. Even though these incremental expansions build on existing systems of government‐provided health insurance, we find that the vast majority of the benefits would still accrue to the bottom three deciles of the income distribution when we include the value of employer‐ and government‐provided health insurance in our expanded yearly income measure. (JEL D31, H51, I14)     

Upper and Lower Bound Estimates of Inequality of Opportunity: A Cross-National Comparison for Europe

I provide lower and upper bound estimates of inequality of opportunity (IOp) for 32 European countries, between 2005 and 2019. Lower bound estimates use machine learning methods to address sampling variability. Upper bound estimates use longitudinal data to capture all-time invariant factors. Across all years and countries, lower bound estimates of IOp account from 6 percent to 60 percent of total income inequality, while upper bound estimates account from 20 percent to almost all income inequality. On average, upper bound IOp saw a slight decrease in the aftermath of the Great Recession, recovering and stabilizing at around 80 percent of total inequality in the second half of the 2010s. Lower bound estimates for 2005, 2011, and 2019 show a similar pattern. My findings suggest that lower and upper bound estimates complement each other, corroborating information and compensating each other's weaknesses, highlighting the relevance of a bounded estimate of IOp.     

Unexpected windfalls,education, and mental health: evidence from lottery winners in Germany

This paper investigates the causal impact of large unexpected windfalls on individual mental health, physical health, as well as health behaviors. I use a large individual-level panel data set of lottery winners from Germany between the years 2000 and 2011 and observe lottery winners before and after winning a large lottery prize. Mental health declines immediately after winning a large lottery prize for individuals with low education and low levels of financial literacy. While these individuals report being happier after winning the lottery, evidence from commonly used SF-12 measures of mental health indicates that winners with low education experience increased role limitations due to emotional problems, are more anxious, and have less energy after their win. The impact on various measures of mental health is highly robust, statistically significant, economically significant, and persists for up to two years after the win. Unexpected windfalls have no impact on the mental health of individuals with high education or high financial literacy. Winning the lottery has no impact on individuals’ health behaviors such as smoking or alcohol consumption, and it has no impact on doctor visits, hospital stays, or illness-related work absences regardless of education level.     

Determinates of the decline in the income-velocity of money in China: a new perspective

The income velocity of money in China has been declining since the country’s reform. By studying the money demand behavior in the agricultural and non-agricultural sectors, we found that the marginal propensity to money demand is much higher in the non-agricultural sector. This implies that as the share of the agricultural sector in national income declines, monetary expansion is expected to meet not only the needs of income growth, but also the rapid structural shifts in the sectoral composition of income. Hence, non-inflationary monetary expansion is possible as development proceeds. This provides a new perspective in understanding the decline in the income-velocity of money in China. __________ Translated from Social Sciences in China (中国社会科学), 2005,(4) (in Chinese)     

Educational Inequality and the Expansion of UK Higher Education

In this paper we explore changes over time in higher education (HE) participation and attainment between people from richer and poorer family backgrounds during a time period when the UK higher education system expanded at a rapid rate. We use longitudinal data from three time periods to study temporal shifts in HE participation and attainment across parental income groups for children going to university in the 1970s, 1980s and 1990s. The key finding is a highly policy relevant one, namely that HE expansion has not been equally distributed across people from richer and poorer backgrounds. Rather, it has disproportionately benefited children from relatively rich families. Despite the fact that many more children from higher income backgrounds participated in HE before the recent expansion of the system, the expansion acted to widen participation gaps between rich and poor children. This finding is robust to different measures of education participation and inequality. It also emerges from non‐parametric estimations and from a more detailed econometric model allowing for the sequential nature of education choices with potentially different income associations at different stages of the education sequence.     

Economic growth and poverty traps in sub-Saharan Africa: The role of education and TFP shocks

This paper investigates the “education-total factor productivity trade-off” in explaining income per worker differences between sub-Saharan (unlucky) and G7 (lucky) economies. First, we examine the dynamics of average years of schooling (i.e. education), capital per worker, income per worker, and total factor productivity (TFP) across sub-Saharan and G7 countries. We confirm that physical capital and education levels partially explain income per worker differences between lucky and unlucky economies. Second, we undertake a novel examination of the impact of technology shocks on income per worker, with the goal of understanding the role of technology variation in causing cross-country income per worker differences, and as a potential contributor to overall slow growth in the sub-Saharan region. In a vector autoregressive (VAR) framework, we show that the impact of “ad hoc” TFP shocks on income per worker is larger in unlucky economies than in lucky ones. We observe that average TFP volatility in the “unlucky world” is eight times higher than in the “G7 world”. We argue that the order of magnitude of the impact heavily depends on the level of the TFP volatility. Last, we suggest that the documented differences in the amount of physical capital and in the productivity of human capital between these two regions add conceptual support for the existence of poverty traps for sub-Saharan Africa.     

Multidimensional Inequality Across Three Developed Countries

This paper produces comparable estimates of multidimensional inequality for the U.S., Germany, and Australia. Two alternative approaches with differing interpretations are employed. The first method projects all facets of welfare onto a single variable which is then analyzed using standard univariate techniques. The second approach establishes equivalent‐income distributions that would lead to an equalization of welfare, such that the difference between this counterfactual and the true income distribution can be measured. This difference is then interpreted as the degree of income redistribution required to offset welfare inequality. Using data on permanent incomes, health scores, years of education, and leisure times, we observe much higher levels of inequality in the U.S. than in Germany or Australia. Our results are highly statistically significant and hold over a large variety of weighting specifications.     

“PAY IT FORWARD” AND HIGHER EDUCATION SUBSIDIES: A MEDIAN VOTER MODEL

Since 2012, at least 24 states have considered legislation on Pay It Forward (PIF) models of higher education finance (which enable students to pay the price of college upon departure from an institution, as opposed to paying upfront tuition). This paper proposes a theoretical model of PIF policies within a framework in which voters belonging to different income groups vote over the level of subsidies to higher education. We analyze the impact of two types of potential PIF policies—a deferred tuition approach and an income share approach—on college access and on voting equilibria over subsidy levels. The results show that college access is enhanced by PIF policies. The equilibrium level of subsidies depends crucially on the pattern of income distribution, in particular on the relationship between mean income and the income of the median income group, and on whether higher education widens or narrows the distribution of income. We show that the equilibrium level of subsidies to higher education will not necessarily decline under PIF, and may increase in some circumstances due to changes in college access for low‐income groups. (JEL I22, I23)     

How do income and education affect health inequality: evidence from four developing countries

Using household survey data from four countries ? Albania, Nepal, Tajikistan and Tanzania ? this article calculates income-related inequality in health care utilization. We measure health disparity separately for generally and chronically ill individuals by constructing two models: one for the probability of a visit to a physician and another for the number of visits. Following model-based measurements, we decompose inequality into two major parts: one accounted for by identity-related factors and another by socioeconomic and other factors such as education, geography and distance to a clinic. We propose a new method to quantify the effect of changes in income and education on health disparity. One of our important findings suggests that health disparity is pro-rich in all our sample countries. The pro-rich disparity is prevalent among generally ill as well as chronically ill patients, in both visit probability and visit frequency models. Health inequality seems primarily driven by income differences followed by nonidentity factors. Further, the principle of equal treatment for equal need is not fulfilled in any of our countries. Among policy implications, increasing average income and education in a way that also reduces disparity in income and education, respectively, will substantially shrink inequality in health care utilization.     

CAN GREATER ATTENTION TO WOMEN'S RIGHTS HELP ADDRESS INCOME INEQUALITY?

We investigate the relationship between women's economic, social, and political rights with the level of income inequality. We use dynamic panel estimation to check our hypothesis that that strong rights for women translate into higher participation in economic productive activities, improve income and education and support for future generations, thus reducing the overall income inequality in the economy. We further look at how a country's overall economic performance and the status of women's education alter the relationship. The relationship is strengthened if countries are either in the higher‐income spectrum or have higher levels of female educational attainment. (JEL O1, I00, H00)     

The impact of education expansion on wage inequality

The findings on education expansion and income inequality have important implications for policymakers to implement effective policies to reduce income inequality. This study attempts to explain how education expansion affects income inequality by education distribution and the rate of return to education. We decompose the effect of education expansion on wage gaps into price effect and structure effect. We compare the income inequality from 2002 to 2013 using the Chinese Household Income Project (CHIP) 2002 and CHIP2013 survey data and employ FFL decomposition method. Our findings suggest that income inequality increased in 2013 and that income inequality among the high-income groups increased even more significantly. The structure effect of education expansion on income inequality is negative, when average education increases one year, the income gap between 80th and 20th will decrease 1.2%, in other words, education expansion decreases income inequality by allowing a wide range of individuals to attend college. However, this effect is offset by the price effect, which is positive and much more significant in magnitude. One extra year of average education will increase income gap by 29% which means that the demand for high-skilled labour is increasing faster than the supply and thus lead to the increasing premium for higher education return.     

The Implications for Health,Depression, and Life Satisfaction from a Permanent Increase in Income for the Disadvantaged Elderly: Evidence from Taiwan

This paper uses an exogenous increase in income for a specific subgroup to explore the extent to which higher income leads to higher levels of health and well-being. In 1995, the Taiwanese government implemented the Senior Farmer Welfare Benefit Interim Regulation (SFWBIR) that was a pure cash injection to senior farmers. A difference-in-differences (DiD) approach is used on survey data from the Taiwanese Health and Living Status of Elderly in 1989 and 1996 to evaluate the short-term effect of the SFWBIR on self-assessed health, depression, and life satisfaction (LS). Senior manufacturing workers are employed as a comparison group for senior farmers in the natural experiment. This paper provides evidence that the increase in income caused by this pension reform significantly improved the mental health of senior farmers by reducing 1.697 points of the depression scale in DiD and 2.178 points in the robust estimation; however, it had no significant short-term impact on self-assessed health or LS.     

高等教育投资规模与大学生就业率的相关性分析

典型调查表明,扩招会带来大学生就业率的下降,扩招对不同层次和不同学科的大学生就业率的影响程度不同,不同范围的扩招对大学生就业率的影响程度也不同,这是高等教育投资规模扩张导致人力资本投资风险增大、收益降低的表现。要控制投资的增长规模,调整投资的层次结构、专业结构和地区结构,从而优化高等教育资源配置。     

An extension of the Tiebout hypothesis of voting with one’s feet: the Medicaid magnet hypothesis

This study empirically extends the Tiebout hypothesis of ‘voting with one’s feet’ in two ways. First, it provides updated estimates using net migration data for the period 2000–2008. Second, in addition to investigating variables reflecting public education outlays, property taxation and income taxation, it investigates whether migrants are attracted to states with higher Medicaid benefits per recipient. The latter hypothesis is referred to as the ‘Medicaid magnet hypothesis’. The analysis includes three economic variables, three quality of life variables and three Tiebout-type factors in addition to Medicaid benefits. Results indicate that consumer voters were attracted to states with higher per pupil public school spending, lower property and income tax rates, and that certain consumer-voters may be attracted to states that offer higher levels of Medicaid benefits.     

TAXES,INCOME, AND RETIREMENT SAVINGS: DIFFERENCES BY PERMANENT AND TRANSITORY INCOME

This article examines the determinants of and benefits from saving for retirement in tax‐preferred accounts by permanent and transitory income levels. We find that higher incomes (both permanent and transitory) are associated with a greater probability to contribute and larger contributions. We also find that tax benefits for retirement savings increase strongly with income, although the increase is slightly smaller when taxpayers are ranked by their permanent (rather than current) income. In addition, we find that a large portion of the benefits from the Saver's Credit go to taxpayers who would not be eligible based on their permanent income. Finally, we find that recent tax changes (including the introduction of the Saver's Credit) significantly increased contributions among low‐income households, although the effect was centered among those with only transitorily low income. (JEL H24, H31, E21)     

Income, income inequality, and health: Evidence from China

This paper tests using survey data from China whether individual health is associated with income and community-level income inequality. Although poor health and high inequality are key features of many developing countries, most of the earlier literature has drawn on data from developed countries in studying the association between the two. We find that self-reported health status increases with per capita income, but at a decreasing rate. Controlling for per capita income, we find an inverted-U association between self-reported health status and income inequality, which suggests that high inequality in a community poses threats to health. We also find that high inequality increases the probability of health-compromising behavior such as smoking and alcohol consumption. Most of our findings are robust to different measures of health status and income inequality. Journal of Comparative Economics 34 (4) (2006) 668–693.     

ECONOMIC FREEDOM,SPORT POLICY,AND INDIVIDUAL PARTICIPATION IN PHYSICAL ACTIVITY: AN INTERNATIONAL COMPARISON

Many countries promote participation in physical activity among its citizens. We undertake an international comparative analysis of participation using data from 34 countries in the 2007 International Social Survey Programme Leisure Time and Sports module, augmented with country‐specific characteristics capturing economic freedom and national sport policy. Gross domestic product per capita and economic freedom are associated with higher physical activity participation; past success of the national team in the Olympics is associated with lower participation, but hosting sports mega‐events is associated with higher participation. Our findings indicate that participation in sport and physical activity falls with age and rises with education and income. (JEL H59, I12, I18, J22, L83)     

Impact of education and health on poverty reduction: Monetary and non-monetary evidence from Fiji

Fiji signed the United Nations 2015 target of halving extreme poverty from its 1990 level, but like many developing countries it is facing challenges in meeting this goal. This paper presents the economic modelling using Fiji's Household Income and Expenditure Survey 2002/03 dataset to examine the economic and social factors crucial for poverty reduction. Two hypotheses are tested: first, we estimate the monetary effects of education at the aggregate and disaggregated returns to education (primary, secondary, tertiary levels) and by income quartiles, and second, test the non-monetary education and health factors as channels of impact promulgated as effects against poverty prevalence. The monetary results indicate that all income quartile households (i.e. lowest to highest) benefit from additional skills obtained through formal education. While those at the lowest income quartile in particular benefit the most from formal education, however it cannot sustainably prevent people with only primary education from falling into poverty. The results for non-monetary models show that education has a positive and significant influence on the tendency of the people to engage in health prevention activities and in acquiring good housing facilities.     

The transmission of partner mental health to individual life satisfaction: Estimates from a longitudinal household survey

This paper investigates the relationship between partner's mental health and individual life satisfaction, using panel data and calculating the monetary valuation of mental illness. Accounting for measurement error and endogeneity of income, partners' mental health has a significant association with individual well-being. The additional income needed to compensate someone living with a partner with a mental condition is substantial (ranges between USD 33,000 and USD 50,000). Further, individuals do not show adaptation to partners' mental illness. The results have implications for policy-makers wishing to value the effects of policies that aim to impact on mental health and levels of well-being.     

MULTIPLIER EFFECTS OF PUBLIC SERVICES IN A TWO‐SECTOR MODEL OF MONOPOLISTIC COMPETITION

In a two‐sector model of monopolistic competition, this paper explores what impacts an expansion of government spending on public services has on national income. In the short run where entry and exit of firms are restricted, a rise in government spending on services like health care (which has only a role of substituting for market services) increases national income, but that on services like elderly care (which has not only this role but also another role of contributing to home production of services) decreases it. These results are reversed in the long run. Welfare effects of public services are also examined.