Can educational expansion improve income inequality? Evidences from the CHNS 1997 and 2006 data

Rapid education expansion and rising income inequality are two striking phenomena occurring in China during the transitional period. Using the China Health and Nutrition Survey (CHNS) data collected in 1997 and 2006, this paper studies how education affects individual earnings during the transitional process. We find that education accounts for only a small fraction of the personal earnings and income gap between different groups. We analyze the underlying mechanism of the impact of education on earning. More educated people tend to enter state-owned sectors, have a low probability of changing jobs in the labor market and work less time; all of these will have a pronounced impact on earning and income inequality. Quantile regression analysis shows that the low-income group's education return rate is lower, which helps little in narrowing the income gap. We decompose the earning gap into four factors: population effect, price effect, labor choice effect and unobservable effect. In explaining the earning gap in China, the price effect is more important than the population effect. The labor choice effect is also significant. We conclude that increasing educational expenditure with no complementary measures such as reforming the education system and establishing a competitive labor market helps less in reducing income inequality.     

On the suitability of income inequality measures for regional analysis: Some evidence from simulation analysis and bootstrapping tests

The paper looks at the sensitivity of commonly used income inequality measures to changes in the ranking, size and number of regions into which a country is divided. During the analysis, several test distributions of populations and incomes are compared with a ‘reference’ distribution, characterized by an even distribution of population across regional subdivisions. Random permutation tests are also run to determine whether inequality measures commonly used in regional analysis produce meaningful estimates when applied to regions of different population size. The results show that only the population weighted coefficient of variation (Williamson’s index) and population-weighted Gini coefficient may be considered sufficiently reliable inequality measures, when applied to countries with a small number of regions and with varying population sizes.     

Human capital inequality and income inequality: testing for causality

This study investigates the causal relationship between human capital inequality and income inequality in case of Pakistan. The annual time series data ranging from 1973 to 2009 is used for econometric analysis. Johanson co-integration and Granger Causality tests are used to confirm the existence of long run relationship and the causal relationship between human capital inequality and income inequality. The results indicate that there is positive relationship between the two types of inequalities in the long run. The estimates of causality test indicate that income inequality causes the human capital inequality but human capital inequality does not cause income inequality. Policy initiatives to reduce income inequality may empower people economically to avail skill building opportunities and accumulate their human capital through access to educational services.     

Generational Dimensions of Neoliberal and Post‐Fordist Restructuring: The Changing Characteristics of Young Adults and Growing Income Inequality in Montreal and Vancouver

There is growing concern over income inequality and its generational dimensions. Post‐Fordist and neoliberal restructuring have reshaped urban labour markets, resulting in growing inequalities that disproportionately afflict younger workers. This article empirically analyses the transition as experienced in Montreal and Vancouver, two Canadian cities that have undergone restructuring in different ways. The study of young adults' changing incomes reveals growing intra‐ and inter‐cohort inequality, and an increasing intergenerational income gap in both cities. Income inequality is greater in Vancouver, with its more pronounced post‐Fordist labour force composition and neoliberalized governance context. Known factors such as occupation and gender affect the earnings structure, but educational attainment has increased the most in terms of its effect on incomes. Inequalities among young adults are expected to magnify in the future due to unevenness in educational attainment. Urban research ought to pay close attention to the role of education in structuring inequalities, and the ways the impact of restructuring is unevenly distributed across generations.     

Regional income inequality and economic development

It is the purpose of this paper to critically re-examine Williamson's original axiom of regional inequality as it relates to the process of national development under a new dimension: income distribution disparities within the population of the regions. The dynamic association between inequality and development in general and the convergence hypothesis in particular will be retested. Instead of Williamson's coefficient of variation we introduce a set of Regional Dissimilarity Indices that measures the dissimilarity of the spatial distribution of population by income at the national level.     

Regional Inequalities in Consumption Patterns: A Multilevel Approach to the Case of Italy

The main aim of this paper is to evaluate the disparities in the Italian regions on the demand side. In more detail, an attempt will be made to find if the consumption behaviour of Italian households is different in the regions. With this in mind, Istat's 2000 Italian Family Budget data set was analysed. The data in question, which were collected through a two‐stage sample over Italy's 20 regions, contains information regarding the expenses of approximately 23,000 households. In this analysis, both households and regions are considered as units: households are nested in the regions so that the basic data structure is hierarchical. In order to take this hierarchical structure into account, a multilevel model was used, making it possible for parameters to vary randomly from region to region. The model in question also made it possible to consider heterogeneity across different groups (regions), such as stochastic variation. First, regional inequalities were tested using a simple model in which households constituted the first level of analysis and were grouped according to their region (the second level). As a second step, and in order to investigate the interaction between geographical context and income distribution, another model was used. This was cross‐classified by income and regions. The most relevant results showed that there is wide fragmentation of consumption behaviour and, at the same time, various differentiated types of behaviour in the regions under analysis. These territorial differentials become clear from income class and items of consumption.     

Inequality and catching-up under decreasing marginal impatience

This paper examines how endogenous time preference interacts with inequalities in economic development. We consider two distinct groups of households with intrinsic inequality (e.g., capitalists and workers), and show that (i) under decreasing marginal impatience (DMI), an unequal society may be preferable for poor households than an egalitarian one in which every household owns an equal share of asset; (ii) poor households tend to benefit more under DMI than CMI (constant marginal impatience) from positive shocks; (iii) inequality exhibits a sharp inverted-U shape as more people become rich, which should be good news for developing countries in catching up; and (iv) a tax on capital income reduces poor households’ income when the fraction of the rich is sufficiently small. We also examine immigration and discuss capital mobility.     

农村人口老龄化对收入不平等影响的实证研究

利用1989年-2011年的农户微观家计调查数据,采用方差分解和回归分解相结合的方法,考察农村人口老龄化对收入不平等的影响。研究发现农村收入不平等的总体变化主要是由组间效应所引起,即不同出生组之间不平等程度的加剧是收入不平等的主因;无论采用方差分解法还是采用回归分解法得到的研究结论表明,农村人口老龄化的确加剧了收入不平等,其影响程度相对较小,但从时间变化趋势来看,人口老龄化效应有增强之势。     

Do Unions Affect Labor's Share of Income: Evidence Using Panel Data

There have been a number of studies analyzing the impact of unions on labor's share of income. Most have relied on either time series or cross‐section data. The purpose of this paper is to determine the impact of unions on labor's share of income in the U.S. This study adds to the understanding of this topic by developing an analytical model of imperfect competition and estimating the model using panel data for the manufacturing sector. This study finds that unions have a positive impact on labor's share of income. Specifically, this paper finds that labor's share declined 17.9 percent between 1997 and 2006 whereas, if unionization density had remained at its 1997 level, labor's share would have declined only 13.9 percent. Thus, the decline in unionization explains about 29 percent of the decline in labor's share of income. This paper is important for three reasons. First, this paper sheds light on whether social and institutional forces play an important role in determining the distribution of income between labor and capital. Second, it helps to explain recent increases in wage inequality. Third, it has implications for understanding the potential impact of legislation, such as the Employee Free Choice Act, that would make it easier for workers in the U.S. to unionize.     

On the distributional effects of trade policy: Dynamics of household saving and asset prices

This paper studies the effect of trade liberalization on inequality. We develop a theoretical framework that generates economy-wide distributions of wealth and income for different levels of trade protection. The model unambiguously determines the effect of liberalization on inequality; and rationalizes why larger inequality can be the outcome of a welfare enhancing policy, as households reduce their buffer savings when liberalization lowers the price of food. The framework reconciles the increase in inequality, the fall in the value of land, and farmers’ opposition to freer trade, that have featured in different liberalization episodes. We also present empirical support for the model’s predictions.     

Who Gains from the Demographic Dividend? Forecasting Income by Age

Changes in the population age structure are known to influence the total income per person, but little is known about whether the changes are equally shared across the population or are concentrated on particular age groups and/or birth cohorts. The answer to this question has potentially important implications for income inequality, human capital investment, and fertility decision-making. We propose a new model of intergenerational transfers which distinguishes between the effects of changes in population structure and the effects of changes in family age structure. Using age-specific data from annual income and expenditure surveys of Taiwan between 1978 and 1998, we show that changes in age structure have had a very favorable effect on Taiwan's income growth. The gains are not equally shared by all age groups, however. Children and young adults have benefited the most, while the elderly have benefited the least. The population and family age structures have independent effects on per capita income; the effect of the population age structure is most important. Generational differences in per capita income are closely related to intergenerational differences in earnings, suggesting only a weak form of altruism. Finally, we predict that, on average, population aging will adversely influence the per capita income growth in Taiwan in the coming decades.     

STATISTICAL INFERENCE VIA BOOTSTRAPPING FOR MEASURES OF INEQUALITY

In this paper we consider the use of bootstrap methods to compute interval estimates and perform hypothesis tests for decomposable measures of economic inequality. Two applications of this approach, using the Gini coefficient and Theil's entropy measures of inequality, are provided. Our first application employs pre- and post-tax aggregate state income data, constructed from the Panel Study of Income Dynamics. We find that although casual observation of the inequality measures suggests that the post-tax distribution of income is less equal among states than pre-tax income, none of these observed differences are statistically significant at the 10% level. Our second application uses the National Longitudinal Survey of Youth data to study youth inequality. We find that youth inequality decreases as the cohort ages, but between age-group inequality has increased in the latter half of the 1980s. The results suggest that (1) statistical inference is essential even when large samples are available, and (2) the bootstrap procedure appears to perform well in this setting. © 1997 by John Wiley & Sons, Ltd.     

基于收入分布的收入差距扩大成因的分解

本文采用核平滑化的半参方法估计了1987年、1996年、2004年我国城市居民收入分布曲线,并且基于收入分布又进一步分解了导致城市居民收入差距扩大的主要原因。收入差距扩大的成因可以分为两类:一是劳动者的劳动力特点的普遍变化,如劳动者教育水平的提高,行业、职业分布的变化;二是对劳动力特点回报率的变化,如教育回报率的提高,各行业、职业回报率差异的扩大等。本文发现后者是导致收入差距扩大的主要原因。     

Business cycles and redistribution: The role of government quality

We study how government quality mediates the relationship between business cycles and redistribution. Our key hypothesis is that the potential of income redistribution to reduce rising inequality levels after an economic crisis depends on government quality. The empirical evidence based on a panel of 46 countries over the period 1996–2016 lends strong support to this hypothesis. We find that macroeconomic recessions promote redistribution of income in high government quality contexts, but they lead to wider economic inequalities in countries with poor quality of government.     

Extremal properties of the Theil and Gini measures of inequality

Quality & Quantity - Two popular inequality measures used in the study of income and wealth distributions are the Gini (G) and Theil (T) indices. Several bounds on these inequality measures are...     

Individualization and Marketization of Responsibility for Gender Equality: The Case of Female Managers in China

This article investigates the question of where the responsibility for promoting gender equality resides in the Chinese employment context. Utilizing Acker's (2006) inequality regimes framework, the study explores women's underrepresentation in management roles in China and explains the persistence of gender inequalities in managerial echelons of Chinese organizations. Based on 30 interviews with female managers, the findings demonstrate the marketization and individualization of gender equality in organizational activity. The existing gender inequality, and the lack of responsibility for tackling it, has been either legitimized by eluding to the commercial‐only focus of organizations or rendered invisible through a belief in individual choice as the determining factor of career progression for women. Gender inequality in management is also maintained through the compliance of female managers themselves with the presumed legitimacy of gender‐based differential access to managerial roles. References to culture and tradition, market forces, competitive pressures, and individual choices by female managers are often made in explaining the unequal career paths and outcomes for men and women in their organizations. Our findings contribute to the human resource management (HRM) literature by framing macrosocietal context as a dynamic and endogenous aspect of management of human resources in organizations and provide novel insights into the interplay between HRM and societal context. © 2016 Wiley Periodicals, Inc.     

Understanding Income Inequality in China: A Multi-Angle Perspective

Economic reforms have brought about spectacular growth and vast improvements of people’s living standards in China since 1978. In the meantime, unbalanced regional growth and income inequality have become two important concerns of future development. Most available studies on income distribution have either focused on the rural population or on the urban citizens. This paper stresses the importance of adopting a multi-angle approach to fully understand income inequality in China. We first use some top-down information to form a general picture of inequality for the whole country, and then use some bottom-up household survey data to explain in detail the development of inequality over time regarding rural/urban inequality, rural inequality, urban inequality and inter-regional inequality, the relative importance of different income sources to overall inequality. This revised version was published online in July 2006 with corrections to the Cover Date.     

Global estimates of growth–inequality–poverty (GIP) triangle: evidence from World Bank’s classification countries

This study extended the concept of ‘growth–inequality–poverty (GIP) triangle’ by using the principle component approach which allows us to composite different poverty and inequality indicators into one single index that contains most of the useful information from the original dataset. Using the idea of GIP triangle, this study examines the long-run relationship among weighted poverty index (which comprises headcount ratio, poverty gap and squared poverty gap); weighted inequality index (i.e., Watts Index, Gini Index and MLD Index) and average monthly per capita income in the designated 138 countries according to World Bank’s classification over a period of 2005–2010. The data set mainly contain countries’ unit record household survey at least one which is conducted between the countries during the sample period. The regression model encompassing the impact of economic growth and income inequality on poverty reflects that income inequality increases poverty while economic growth decreases poverty. It indicates that the impact of inequality in increasing poverty is a somewhat greater than that of growth in average income in reducing overall poverty in a sample countries. The other regression model encompassing the impact of economic growth and poverty on income inequality showed that the poverty itself is also likely to be a barrier for poverty reduction; and inequality seems to predict lower future growth rates. The final regression model depicting the impact of poverty and income inequality on mean income of the household suggests that poverty itself reduces mean income of the household while income inequality increases economic growth. The results are interesting and simply suggest that whenever social institutions malfunction, the incidence of damage would usually be distributed unevenly over the society’s members.     

Ubiquitous inequality: The home market effect in a multicountry space

We show that spatial inequalities in an economic space of multiple countries in terms of both nominal income and real income are ubiquitous in the sense that they appear when countries are differentiated by population only. A new trade theory model is constructed without any freely traded homogeneous good, so that we can examine the home market effect (HME) and the non-monotonic relation between income inequalities and globalization. Meanwhile, there are three HME definitions for a two-country space in terms of firm share, labor wage, and trade pattern. The first two remain applicable in a multicountry space, and they are shown to be equivalent. However, a natural extension of the third is not equivalent.     

Economic reforms and income distribution in Turkey

The aim of this paper is, first, to find out the income sources of the improvement in income inequality in the reform period between 2002 and 2007. s, we aim to assess the distributional impacts of macroeconomic policies over the 2002–2007 reform period by examining the contributions of different income groups to overall inequality. Income data obtained from the Household Budget Surveys of TurkStat covering the 2002–2013 period are used. The results show that there have been significant improvements in the income distribution after 2002. The extent of this improvement seems to have been higher during the 2002–2007 reform period than for the rest of the period after 2007. Entrepreneurial and financial income groups were the most distinctive for this improvement. The results also indicate that the contribution of transfer payments was very small, but surprisingly positive in both the 2002–2007 and 2007–2009 periods, and expectedly negative in the 2009–2013 period.