Migration,remittances, and inequality: estimating the net effects of migration on income distribution

"This paper examines the net effects of migration and remittances on income distribution. Potential home earnings of migrants are imputed, as are the earnings of non-migrants in migrant households, in order to construct no-migration counterfactuals to compare with the observed income distribution including remittances. The earnings functions used to impute migrant home earnings are estimated from observations on non-migrants in a selection-corrected estimation framework which incorporates migration choice and labor-force participation decisions. For a sample of households in Bluefields, Nicaragua, migration and remittances increase income inequality when compared with the no-migration counterfactual."     

Public sector employment and the distribution of income

In this paper a simple general equilibrium model is presented to examine the impact of three forces on the distribution of (labor) income: (i) changes in educational composition of the labor force; (ii) changes in productivity of different educational groups; and (iii) changes in the volume of public sector employment. A numerical illustration of the model based on observed and derived figures for the Netherlands suggests that the impact of a growing public sector on the distribution of income might very well be substantial, resulting into more inequality of income, while the combination of the other two forces has resulted in less inequality of income.     

STASIS AMID CHANGE INCOME INEQUALITY IN CANADA 1965-1983

Income inequality in Canada has not changed significantly over the past two decades, though this apparent stability may be surprising in view of the major economic and social changes that occurred over this period. The share of income going to the bottom quintile remains at about four percent while the top quintile continues to receive about 40 percent of income.
Social trends such as lower fertility rates have coincided with increased female labour force participation to increase family incomes in the middle and upper-middle parts of the income spectrum. At the same time, the trend for baby boom children to establish their own separate households, and increased divorce and separation rates, have tended to create more small family units with low incomes. These social trends, in isolation of other factors, would have increased income inequality.
However, economic factors have apparently offset these tendencies. Since employment income is concentrated in the middle and upper-middle ranges, the relative fall in this source of income over the past two decades tended to be equalizing. Similarly, the fact that a large part of total investment income accrues to the elderly who have below average income implies that the trend towards high interest rates has been equalizing. Finally, the social "safety nets" put in place in the mid-1960s and early 1970s have grown in relative importance, and this too has had an equalizing impact on the distribution of income.
Given the overall stability in income inequality, the equalizing tendencies of economic factors such as high interest rates and relatively slow economic growth, with the large automatic responsiveness of governments' social safety net programs, appear to have just about exactly offset the disequalizing social factors of "baby boomers" leaving home, lower fertility, higher divorce and separation rates, and higher female labour force participation.     

Growth, Inequality, and Well-Being: Intertemporal and Global Comparisons

We use several well-being measures that combine average incomewith a measure of inequality to undertake intertemporal andglobal comparisons of wellbeing. The conclusions emerging fromthe intertemporal analysis are that the impact of these measureson temporal trends in well-being is relatively small on average,but changing across the decades. In particular, it suggeststhat changes in well-being were understated in the 1960s and1970s and overstated in the 1980s and 1990s. Our global analysiscovering ca. 81 per cent of the world's population demonstratesthat global well-being is at least 50 per cent smaller thanworld per capita income if the unequal income distribution isalso factored in. Conversely, growth in world well-being hasbeen larger than world income growth between 1970–1998.Since the inclusion of inequality has an important impact onwell-being comparisons, it is of great importance to generatemore consistent and intertemporally as well as internationallycomparable data on inequality. (JEL I31, D63)     

Factor Components of Inequality: A Cross‐Country Study

This paper uses data from the Luxembourg Income Study to examine some of the forces that have driven changes in household income inequality over the last three decades of the twentieth century. We decompose inequality for six countries (Canada, Germany, Norway, Sweden, the U.K., and the U.S.) into the three sources of market income (earnings, property income, and income from self‐employment) and taxes and transfers. Our findings indicate that although changes in the distribution of earnings are an important force behind recent trends, they are not the only one. Greater earnings dispersion has in some cases been accompanied by a reduction in the share of earnings which dampened its impact on overall household income inequality. In some countries the contribution of self‐employment income to inequality has been on the rise, while in others, increases in inequality in capital income account for a substantial fraction of the observed distributional changes.     

Global inequality and international trade

The paper analyses the effect of widespread trade liberalisationon global income inequality. The analysis of the trend in globalinequality during 1981–97, presented in the first partof the paper, shows that the apparent growth of income inequalityamong countries conceals a process of convergence. Some developingcountries achieved significantly faster economic growth thanthe advanced industrialised countries and, though small in number,they actually account for a majority of the population of thedeveloping world. Thus international inequality (i.e., the inequalityof distribution of per capita incomes among the world's population)in fact declined even though the inter-country income inequalityincreased. The analysis in the second part of the paper shows(i) that while improved trade performance did have a stimulatingeffect on growth performance of countries, trade liberalisationhad extremely varied effects on trade performance across countries,and (ii) that the distribution of benefits and costs of tradeliberalisation across countries has been such as to reduce internationalinequality without affecting inter-country inequality.     

STRUCTURAL CHANGES AND THE DISTRIBUTION OF INCOME BY SIZE: THE CASE OF INDIA

The interrelation between changes in the economic structure, i.e., industrial distribution of income and labor force, and the size distribution of income is studied in this paper in a case study of India (1951–1960).
The change in the size distribution of income is the sum of changes due to (1) inter-sectoral factors and (2) intra-sectoral factors. The need for this distinction is emphasized by the result obtained for India, that 85% of the changes in the size distribution may be assigned to inter-sectoral factors, and only 15% to intra-sectoral factors. Since the inter-sectoral factors are significantly influenced by changes in the industrial distribution of income and labor force, our result points out a relation between economic growth and the size distribution which quite often is overlooked in studies of the size distribution.
The results obtained in this paper support several cross-section results of Professor Kuznets. In particular some of these are: (a) inter-sectoral inequality in the economic structure widened with economic growth, (b) the inequality in the size distribution of India widened, (c) the level of inequality in India is higher than in any of the eight developed countries considered.     

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.     

INCOME INEQUALITY IN GERMANY DURING THE 1980s AND 1990s

The paper estimates a variety of inequality measures for three sub-samples of the German population using cross-sectional data on equivalent income from the German Socio-Economic Panel (GSOEP). The sub-populations under consideration are residents of West Germany including foreigners for the years 1984 to 1996, residents of East Germany for the years 1990 to 1996 and a comprehensive German population for the years 1990 to 1996. Bootstrap methods are applied to test whether changes in inequality are statistically significant. In order to account for panel attrition and over-sampling, sample weights are incorporated into the estimation procedure. The empirical results confirm the relative stability of the West German income distribution. While income inequality in West Germany has generally not altered in an economically relevant way over the period 1985 to 1996, inequality in East Germany has increased after reunification. Despite this increase, inequality remains substantially higher in the western part of the country. Convergence of eastern mean income to the western level generally overcompensated the rise in inequality in East Germany, so that the level of inequality in unified Germany is lower in 1996 than in 1990.     

中国农村居民收入区域不平衡的动态变化及影响因素——基于人口加权变异系数的分析

论文使用人口加权变异系数探析1993—2009年中国农村居民收入区域不平衡的动态变化,并通过对人口加权变异系数进行空间和收入来源的二重分解,分析这种变化的空间和收入来源影响因素。研究发现,中国农村居民收入区域不平衡程度总体上趋于下降,但自1998年以来下降幅度很小。东部、中部、西部和东北四大区域之间的农村居民收入不平衡是影响中国农村居民收入区域不平衡的主要因素,其次是这四大区域内部的不平衡。从收入来源看,工资性收入是导致中国农村居民收入区域不平衡的最主要因素,其次是家庭经营性收入。     

Policy,Demography, and Market Income Volatility: What Shaped Income Distribution and Inequality in Australia Between 2002 and 2016?

Isolating the impact of policy, demographic shifts, and market volatility on changes in income inequality is of great interest to policymakers. However, such estimation can be difficult due to the complex interactions and evolutions in the social and economic environment. Through an extended decomposition framework, this paper estimates the effect of four main components (policy, demography, market income and other factors) on the year-over-year changes in income inequality in Australia between 2002 and 2016. This was a period marked by substantial policy, population, and economic shifts due to factors such as the mining boom, the global financial crisis and increasing immigration. The framework also incorporates a flexible non-parametric market income model which captures demand-side shock better than a standard parametric model. Our results suggest that market income was the primary driver of income inequality for all segments of the income distribution in Australia over the past 15 years. Policy factors, moreover, have had the largest net impact on reducing inequality overall, especially for lower income earners.     

A theory of persistent income inequality

This paper explores the dynamics of income inequality by studying the evolution of human capital investment and neighborhood choice for a population of families. Parents affect the conditional probability distribution of their children's income through the choice of a neighborhood in which to live. Neighborhood location affects children both through local public finance of education as well as through sociological effects. These forces combine to create incentives for wealthier families to segregate themselves into economically homogeneous neighborhoods. Economic stratification combines with strong neighborhoodwide feedback effects to transmit economic status across generations, leading to persistent income inequality.     

Income Inequality in Rural China: Regression-based Decomposition Using Household Data

A considerable literature exists on the measurement of income inequality in China and its increasing trend. Much less is known about the driving forces of this trend and their quantitative contributions. Conventional decompositions, by factor components or by population subgroups, provide only limited information on the determinants of income inequality. This paper represents an early attempt to apply the regression‐based decomposition framework to the study of inequality accounting in rural China, using household‐level data. It is found that geography has been the dominant factor but is becoming less important in explaining total inequality. Capital input emerges as a most significant determinant of income inequality. Farming structure is more important than labor and other inputs in contributing to income inequality across households.     

Employment Patterns of Husbands and Wives and Family Income Distribution in Italy (1977–98)

The pattern of employment among men and women has changed remarkably over the past decades. The growth in the participation in the labor market of women with high-income husbands has heightened concerns that wives' earnings may increase income inequality among married couples, especially in countries like Italy, the U.K., and the U.S., where more noticeable growth of income inequality during the past decade has accompanied changes in employment levels. In this paper we attempt to measure the impact of the changes of women and men's employment patterns on the distribution of income among Italian households, by considering regional differences, using micro data from the Historical Archive of the Bank of Italy Survey of Household Income and Wealth (SHIW) for the period 1977–98. Our results indicate that total income distribution would have been more unequal without women's labor income.     

Trends in real income in Britain: A microeconomic analysis

Trends in real national income are typically assessed using aggregate indicators such as GDP per capita, or mean household income, whereas the income distribution literature focuses on trends in income inequality. By contrast this paper takes an integrated approach to real national income measurement; it uses methods incorporating both size and distributional considerations, and applies them to household income microdata in order to measure changes in real income in the U.K. during the 1980s. A parametric class of decomposable real income indisces is proposed which complements quasi-ordering methods such as rank and generalised dominance criteria by telling us how much real income increased over the period (if at all). The indices are also additively decomposable by population subgroup, a property which helps reveal who the gainers and losers were. The analysis also draws attention to the normative and statistical issues raised by the presence of a few very small incomes.     

Twenty Years of Rising Inequality in U.S. Lifetime Labour Income Values

In this paper we study the evolution of lifetime labour income inequality by constructing present value life cycle measures that incorporate both earnings and employment risk. We find that, even though lifetime income inequality is 40% less than earnings inequality, the total increase in lifetime income inequality over the past 20 years is the same as earnings inequality. While the total increase is the same, the pathways there differ with earnings inequality experiencing a steady increase and lifetime income inequality increasing in spurts particularly in the latter half of the 1990s. Finally, we find the changes in lifetime income inequality are primarily driven by changes in earnings mobility and changes in the earnings distribution itself, changes in employment risk and the composition of the sample, such as the shift toward attaining more education and the ageing population, do not play a large role.     

INCOME MOBILITY IN SPAIN: HOW MUCH IS THERE?

Traditional cross-sectional research is unable to measure the degree of income mobility in an income distribution. Using longitudinal data and various income stability indices, this paper measures the level of permanent inequality (immobility) in Spain for the period 1985–92. Results indicate that the transitory component of inequality is large and the level of income mobility increases over time while income inequality decreases slightly. More stability is found at the top than at the bottom of the income distribution and the range of the registered movements is rather short.     

Does microfinance affect income inequality?

This study addresses the question whether participation of the poor in microfinance contributes to reducing a country’s level of income inequality. Using data from 70 developing countries, we show that higher levels of microfinance participation are indeed associated with a reduction of the income gap between rich and poor people. We also show, however, that the effects of microfinance on reducing income inequality are relatively small. The results of this study add to the discussion on the impact of microfinance on poverty by showing that, although access to microfinance does seem to improve the relative income position of the poor, this improvement is modest, which is probably because the use of microfinance is generally small as compared to the size of the economy of the countries in our sample. Microfinance should, therefore, not be seen as a panacea for bringing down income inequality in a significant way.     

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.     

Sources of Inequality: Measuring the Contributions of Income Sources to Rising Family Income Inequality

We develop a simulation method for measuring the impact of changes in the distributions of the main income sources on growth in family income inequality. We simulate the entire distribution of family income under the counterfactual, “What if the distribution of each source had not changed?” The simulation method allows us to evaluate the impact of changes at any point in the distribution as well as with multiple measures of inequality. We incorporate married‐couple and single‐person families, appropriately accounting for changes in the proportion married. We apply the simulation method to investigate the impact of changes in male earnings, female earnings, and capital income on the distribution of family income in the United States between 1969 and 1999. We find that changes in the distribution of male earnings account for more of the growth in family income inequality than do changes in any other source of income. Changes in the distribution of female earnings have reduced family income inequality.