Concentration of land holdings: An empirical exploration of Kuznets' conjecture

According to Kuznets (1963), the dynamics of the maldistribution process starts from an initial unequal income distribution, then through a cumulative effect, a high concentration of asset holdings is induced which in turn contributes to a high concentration of income. In other words, unequal income distribution tends to be self-perpetuated and unequal asset holdings is a medium of such process. The literature on rural income distribution seems to suggest a different emphasis by assigning a more crucial role to asset holdings, i.e., land, in the explanation of unequal income distribution. This study shows, via a simultaneous equation model and a multi-nation cross-sectional set of data, that both the land and income concentration ratios are positively related. Of the two rival conjectures of emphasis, the empirical evidence lends support in the general case to Kuznets, that is, over the entire range of countries, developed and less-developed, inequality in income seems to cause inequality in land holdings rather than vice-versa In the specific case of less developed countries, it is the high concentration of land holdings that influences the unequal distribution of income.     

Inequality and Participative Democracy: A Self-Reinforcing Mechanism

During the last three decades, a notable increase in economic inequality is observed, accompanied by a decline in people's engagement in politics and electoral participation. This is an unsatisfactory phenomenon as it undermines the legitimacy of democratic representation. This negative association is produced by a complex salient mechanism. This study aims at investigating this issue. Using data from a panel of 28 OECD and European countries, this paper identifies a two-way causal relationship between inequality and political participation. The results show that greater income inequality alienates and discourages people from engaging with common affairs, thus leading to lower political participation. Yet, lower electoral participation leads towards a less equitable distribution of income. Hence, this study reveals a self-reinforcing mechanism where the unequal distribution of income leads to political exclusion, which in turn leads to more inequality.     

Has Greater Stock Market Participation Increased Wealth Inequality in the Us?

Is wider access to stockholding opportunities related to reduced wealth inequality, given that it creates challenges for small and less sophisticated investors? Counterfactual analysis is used to study the influence of changes in the U.S. stockholder pool and economic environment, on the distribution of stock and net household wealth during a period of dramatic increase in stock market participation. We uncover substantial shifts in stockholder pool composition, favoring smaller holdings during the 1990s upswing but larger holdings around the burst of the Internet bubble. We find no evidence that widening access to stocks was associated with reduced net wealth inequality.     

Redistributive innovation policy,inequality, and efficiency

We examine the efficiency and distributional effects of regressive and progressive public R&D policies that target high‐tech and low‐tech sectors using a heterogenous‐agent growth model with in‐house R&D and incomplete capital markets. We find that such policies have important implications for efficiency and inequality. A regressive public R&D investment financed by income tax could boost growth and welfare via a positive effect on individual savings and effort. It could, however, also lower growth and welfare via its effect on the efficiency–inequality trade‐off. Thus, the relationship between public R&D spending and welfare is hump‐shaped, admitting an optimal degree of regressivity in public R&D spending. Using our baseline model, and the US state‐level GDP data, we derive the degree of regressiveness of public R&D investment in US states. We find that US states are more regressive in their R&D investment than the optimal regressiveness implied by our growth model.     

International comparisons of rural-urban educational attainment: Data and determinants

We study cross-country differences in rural and urban educational attainment by using a data set comprising 56 countries. We focus on the determinants of rural-urban educational inequality, which is measured by the ratio of rural to urban average years of schooling within each country. We find that riskier human capital investment, less credit availability, a colonial heritage, a legal system of French origin and landlockedness of nations are all associated with relatively lower rural educational levels and greater rural-urban educational inequality. Conversely, larger formal labor markets, better infrastructure and a legal system of British origin are associated with relatively higher rural educational levels and lower rural-urban educational inequality. We also identify an interaction effect between economic development level and some of these factors. In particular, we find that as development level increases, the negative (positive) relationship between French (British) legal systems and rural-urban educational inequality is reversed and becomes positive (negative).     

Education and the Public Goods Type of Social Capital: Are the Well Educated Free Riding in the Provision of Public Goods?

In the previous literature, education has been found to promote the individual’s investment in social capital. However, little is known about its effect on the public goods type of social capital as many of the studies have used generalized measures of social capital. Using survey data from Japan with information on participation in neighborhood associations and community activities, we find that individuals with higher education are no more likely than those with compulsory minimum education to invest in the public goods type of social capital. Nor do we find evidence that the more educated free ride on the less educated in the provision of public goods.     

Personalist Economics: Moral Convictions,Economic Realities,And Social Action

We examine the relationship between the administrative enforcement of environmental regulation, ethnic heterogeneity, and other community characteristics in New Jersey and New York. We find that the percentage of non-white population in a community is positively related with administrative penalties imposed on violators. However, penalties are lower in more ethnically diverse communities. This result may be due to the fact that these communities are less likely to coordinate to create solidarity across ethnic groups and demand stronger enforcement.     

Redistribution in the age of austerity: evidence from Europe 2006–2013

We examine the relationship between changes in a country’s public sector fiscal position on inequality at the top and bottom of the income distribution during the age of austerity from 2006 to 2013. We use a parametric Lorenz curve model and Gini-like indices of inequality as our measures to assess distributional changes. Based on Statistics of Income and Living Conditions (EU-SILC) and IMF data for 12 European countries, we find that more severe adjustments to the cyclically adjusted primary balance (i.e., more austerity) are associated with a more unequal distribution of income driven by rising inequality at the top. The data also weakly suggests a decrease in inequality at the bottom. The distributional impact of austerity measures reflects the reliance on regressive policies and likely produces increased incentives for rent-seeking while reducing incentives for workers to increase productivity.     

Public financing of health expenditures,insurance, and health outcomes

The effects of public financing of health expenditures, insurance coverage and other factors on health outcomes are examined within health production models estimated using 1960–1992 data across 20 OECD countries. Mortality rates are found to depend on the mix of health care expenditures and the type of health insurance coverage. Increases in the publicly financed share of health expenditures are associated with increases in mortality rates. Increases in inpatient and ambulatory insurance coverage are associated with reduced mortality. The effects of GDP, health expenditures and age structure on mortality are similar to those in previous studies. Tobacco use, alcohol use, fat consumption, female labour force participation, and education levels are also significantly related to overall mortality rates. Increases in income inequality are associated with lower mortality rates, suggesting that the negative relationship between inequality and health outcomes suggested by some previous studies does not remain when a more complete model is estimated. The result that increases in public financing increase mortality rates is robust to a number of changes in specifications and samples. Thus, as countries increase the level of their health expenditures, they may want to avoid increasing the proportion of their expenditures that are publicly financed.     

Unions and wage inequality: The roles of gender,skill and public sector employment

We examine the changing relationship between unionization and wage inequality in Canada and the United States. Our study is motivated by profound recent changes in the composition of the unionized workforce. Historically, union jobs were concentrated among low-skilled men in private sector industries. With the steady decline in private sector unionization and rising influence in the public sector, half of unionized workers are now in the public sector. Accompanying these changes was a remarkable rise in the share of women among unionized workers. Currently, approximately half of unionized employees in North America are women. While early studies of unions and inequality focused on males, recent studies find that unions reduce wage inequality among men but not among women. In both countries, we find striking differences between the private and public sectors in the effects of unionization on wage inequality. At present, unions reduce economy-wide wage inequality by less than 10%. However, union impacts on wage inequality are much larger in the public sector. Once we disaggregate by sector, the effects of unions on male and female wage inequality no longer differ. The key differences in union impacts are between the public and private sectors—not between males and females.     

Policy mechanism choice for environmental management by non-commercial “lifestyle” rural landholders

For some environmental assets in rural areas, the landholders who are having the biggest impact are people with small holdings and an emphasis on lifestyle rather than commercial gains from their land. This paper aims to better understand the motivations and likely responses to policy for lifestyle landholders in Australia, in order to assess which policy mechanisms, if any, are likely to be most efficiently used to influence their land management. Through face-to-face interviews, we find that lifestyle landholders have important differences from commercial farmers, including much smaller properties, a stronger interest in environmental outcomes, a lack of land-management skills and a lack of time for land-management activities. From the perspective of environmental policy programs, engaging with lifestyle landholders is likely to involve higher transaction costs, and there are likely to be higher learning and transition costs per unit area. A framework for selection of policy tools is modified to take account of these findings. It is concluded that the prospects for worthwhile public investments in land-use changes by lifestyle landholders are lower than for commercial landholders.     

Lineage-based heterogeneity and cooperative behavior in rural China

This paper investigates how lineages, the commonly found organizations in rural villages of China, affect people's intra- and cross-lineage cooperative behavior. We use data from the Chinese Household Income Project Survey 2002, which exclusively contains information about the lineage structure in these villages allowing us to classify three levels of lineage-based heterogeneity. Our identification strategy relies on the exogeneity of lineage-based heterogeneity. We find evidence that people in a village with higher lineage-based heterogeneity are less likely to exhibit reciprocity behavior within lineages or contribute to the provision of public goods that are jointly shared across lineages. The estimation results remain robust to the inclusion of various control variables and additional background characteristics. Finally, we examine a number of other economic outcomes and find that more homogenous villages do better than other types of villages.     

我国收入不平等、金融发展和消费需求波动的实证研究:1978～2001

本文考察了收入不平等与总消费需求变动之间的联系,在高收入地区,不平等程度越大似乎消费需求波动越大,而在低收入地区,收入不平等越大,消费需求波动反而较小。本文找到证据表明金融发展水平能有助于解释为什么收入分配在高收入和低收入地区中影响消费需求的短期波动是不同的,本文的政策含义是,加快低收入地区如中西部的经济和金融发展步伐,加大金融发展相机调整的力度。     

He Who Counts Elects: Economic Elites,Political Elites,and Electoral Fraud

What determines the extent of electoral fraud? This paper constructs a model of the tradeoff between fraud and policy concessions (public good provision) which also incorporates the strength of the state. In addition, we parameterize the extent to which economic elites (to whom fraud is costly) and political elites (to whom fraud is advantageous) “overlap.” The model predicts that fraud will be lower and public good provision higher when land inequality is higher, the overlap between elites lower, and the strength of the state higher. We test these predictions using a unique, municipal‐level dataset from Colombia's 1922 Presidential elections. We find empirical support for all the predictions of the model.     

Control–ownership wedge,board of directors,and the value of excess cash

This study investigates the effects of the separation of control and ownership on the value of cash holdings in publicly listed French firms. It also sheds light on the role of board independence in such a relation. Theory suggests that investors are more likely to discount the value of excess cash held by firms with low corporate governance. Using the valuation regression of Fama and French (1998), empirical results show that the value of excess cash holdings decreases dramatically with the separation of control and cash-flow rights of the controlling shareholder. This value discount is, however, less pronounced in firms with more independent boards (i.e., boards with more independent directors and separate chief executive officer and chair positions). Our empirical findings support the argument that excess cash contributes less to firm value when minority shareholders are more likely to be expropriated by controlling shareholders. Independent boards seem to be effective in mitigating investors' concerns about the use of excess cash. Overall, the results provide compelling evidence that cash valuation is largely influenced by corporate governance quality in a concentrated ownership setting.     

Equitable fiscal consolidations

Empirical research has uncovered an equity-efficiency trade-off in alternative fiscal consolidation strategies. Spending-based adjustments are associated with more limited output losses but greater inequality than tax-based adjustments. Moreover, spending-based adjustments are less likely to be reversed, but an increase in inequality reduces the likelihood of achieving a successful consolidation. We investigate the issue of designing a debt consolidation plan which is achieved through a reduction in public consumption and yet is equitable because temporary targeted transfers and tax reductions stabilize consumption of the poorer part of the population. This causes a limited slow-down in the pace of debt reduction because fiscal multipliers associated to the tax/transfer policies are large.     

The Effect of Word-of-Mouth Communication on Stock Holdings and Trades: Empirical Evidence From an Emerging Market

The purpose of this study is to investigate the relationship between investors’ satisfaction and intention and word-of-mouth communication. This study contributes to the ongoing debate on the relationship between investor behavior and word-of-mouth communication. Many studies are related to investors’ participation and individual investors’ asset allocation decisions that are instigated by their social community via word-of-mouth communication whereas this study directly investigates the relationship between investment satisfaction and intention and word-of-mouth communication. We emphasize how many factors are considered when making satisfactory investment decisions. Our results confirm the strong relationship between the satisfaction and intention of investors and word-of-mouth communication. This finding may be useful to regulators, investors and managers who seek to establish effective rules for stock holdings and trade.     

Markups and income inequality: Causal links, 1975-2011

Using data for 20 countries during 1975–2011, this study provides new evidence on the association between the lack of competition, measured by an increase in markups, and income inequality. We find that an increase in markups is positively associated with rising income inequality. More interestingly, not only do extra profits from higher markups accrue to the top-income group, but also, within the top-income group (top 10%), the higher top-income earners (top 1%) tend to benefit disproportionately more than the lower top-income earners (top 5% or 10%). Finally, we highlight the role of labor market policies; the positive relationship between markups and income inequality is less pronounced in countries with better labor protection such as the statutory protection and power of labor unions, generous unemployment benefits, and mandatory minimum wages.     

An exploration of the positive effect of inequality on common property forests

This paper analyzes the household level forces driving the positive impact of inequality on common property forest cover in Mexico. A game theoretic model demonstrates that when common property goods are complementary to private inputs in production, an increase in wealth inequality can lead to a decrease in exploitation of the commons. Data from 350 Mexican common properties show that as inequality increases, those on the lower end of the land distribution are less likely to use the commons. The data also show a negative correlation between inequality and poverty. Alternative hypotheses for these results are considered.