Trade liberalization, wage inequality, and endogenously determined nontraded goods

We examine the boundary between traded and nontraded goods as a channel for trade to impact factor prices. In a two-country, two-factor, continuum-good model, tariffs generate a range of nontraded goods. A tariff reduction has a direct effect to expand a country’s import set and an indirect effect through terms of trade to expand its export set. We show that the export expansion can dominate the import expansion, raising the relative demand for the factor intensively used in production. The result is useful in explaining observed rising wage inequality in developing countries following trade liberalization.     

Can Market Potential Explain Regional Disparities in Developing Countries? Evidence from Turkey

Regional disparity is one of the important characteristics of the Turkish economy. This study examines the impact of market potential on the regional differences in Turkey by investigating wages in the manufacturing industry for 1987 and 2000. Evidence suggests that market potential is an important determinant of inequality in Turkey. In addition, public–private decomposition reshapes the dispersion of wages supportive of rising heterogeneity in the private manufacturing industry. This increases the explanatory power of market potential, which is observed to be high in western Turkey and diminishes toward eastern Turkey. Our findings highlight that during the postliberalization era of the 1980s, Turkey's regional inequality concern transformed into a structural problem which can be explained by provincial market potential. Moreover, our results underline that the modern geography framework, which has been tested for developed economies, is able to elucidate the regional differences in a developing country suffering from persistent imbalances.     

我国地下经济的规模、成因及其影响探讨

地下经济是处于国家正式统计和监管以外的各种经济活动的总称。文章应用通货需求法,利用1979～2009年的相关统计资料,测算了中国改革开放以来的地下经济规模,尝试探讨了地下经济的成因,并对地下经济的影响进行了实证分析。研究结果显示:中国地下经济规模占GDP总值,在1979～2009年介于0.78%～23.28%之间,较重的税收负担和政府管制是地下经济产生的主要原因。地下经济对官方经济具有一定的积极作用,而地下经济规模的扩大减少了财政收入,加剧了现阶段中国居民收入的不平等。     

北京市居民收入差距发展规律与结构特征的实证研究

本文选取1985—2007年的时间序列数据,对23年间北京市居民的收入差距演变规律进行分析,侧重于城镇居民收入差距、农村居民收入差距、以及城乡居民收入差距三个层次,并在对时间序列数据分析基础上,对收入差距的发展趋势进行判断。研究认为,北京市居民收入差距变化大致经历了三个阶段,即差距较小—差距扩大—差距稳中有降;居民收入差距一直存在,但以1993年为节点,之后出现大幅度上升态势;2003—2007年,居民收入差距整体呈现稳中有降的趋势,但降幅不大。对收入差距内部结构的分析显示,23年间,城镇居民收入差距水平小于农村居民收入差距。     

Procedural fairness and the tolerance for income inequality

This paper presents an experiment investigating what cultural and institutional factors underlying a society might render its members more or less tolerant of inequality in favor of greater efficiency. The specific institutional factors we address concern the fairness in the procedures or mechanisms through which individuals believe initial positions or roles in society are determined. Subjects' initial positions (rich vs. poor) are determined based on various criteria (random, meritocratic, arbitrary, and rewarding uncooperative behavior) and individuals' willingness to approve Pareto improvement when the improvement is mainly in favor of the already rich is measured. Our findings show that individuals' willingness to accept higher but more unequal outcomes depends on the source of the initial inequality and random assignment leads to the most tolerance for disadvantageous inequality, generating doubt about commonly held views concerning meritocracy. Moreover, holding the procedures constant, subjects reveal greater tolerance for inequality when self and the opponent share common group identity.     

It takes two to cheat: An experiment on derived trust

Social life offers innumerable instances in which trust decisions involve multiple agents. Of particular interest is the case when a breach of trust is not profitable if carried out in isolation, but requires an agreement among agents. In such situations the pattern of behaviors is richer than in dyadic games, because even opportunistic trustees who would breach trust when alone may act trustworthily based on what they believe to be the predominant course of action. Anticipating this, trusters may be more inclined to trust. We dub these motivations derived trustworthiness and derived trust. To capture them, we design a “Collective Trust Game” and study it by means of a laboratory experiment. We report that overall levels of trustworthiness are almost thirty percentage points higher when derived motivations are present, and this generates also higher levels of trust. In our set-up, the effects of derived trustworthiness are comparable in size to positive reciprocity, and more important than concerns for equality.     

Advances in Inequality Measurement and Usefulness of Statistical Inference

Assessment of inequality measurement is the focus for this survey. All measures of inequality must be evaluated based on a set of desirable properties. More importantly, the usefulness of statistical inference for measures of inequality needs examination.     

POST‐TRANSITION POVERTY TRENDS BASED ON AN ALTERNATIVE DATA SOURCE1

This paper analyses a previously unused source of data – the All Media and Product Survey (AMPS) – to arrive at alternative estimates of the post‐transition poverty path. The motivations for using this non‐official data source are twofold: concern over the comparability of the existing official post‐transition datasets – the Income and Expenditure Survey (IES) and Population Census – and a desire to extend analysis of poverty trends beyond 2001. While official data sources are generally preferred for purposes of poverty analysis, the IES and Census collect data at long (5 or 10 year) intervals, and additional years pass before these datasets become available to the public. In some cases there is also concern about data comparability between surveys. The expenditure data contained in the General Household Survey are available annually, although data are captured in a small number of categories that are not very conducive to analysis at the lower end of the income distribution. Analysis on AMPS data confirms the large decline in poverty implied by an increase of R18 billion (in 2000 Rand) in social grant payments between 2000 and 2004. The direction of this trend is consistent with recent research findings based on more frequently analysed data sources, including the work done by Agüero, Carter and May (2005), Seekings (2006 ) and Meth (2006 ).     

Inequality persistence through vertical vs. horizontal coalitions

This paper aims to contribute to a better understanding of the observed high persistence of cross-country differences in inequality. It focuses on the interactions between inequality and the predominance of either horizontal coalitions (among individuals of similar economic status) or vertical ones (among individuals with different economic status). A model is proposed showing that the interactions between inequality and the type of coalition formed in a society can give rise to self-sustained social contracts where inequality persists. Key mechanisms of the model are illustrated using the transformation in inequality, redistribution and social relations in Modern England, as well as the “paternalist” system of the US South at the beginning of the XXth century.     

Education policy and inequality: A political economy approach

Regression results show that more unequal societies tend to spend comparatively more on higher levels of education. In a two-period model with heterogeneous agents, this paper investigates the political determinants of this bias. In the first period, public education is financed by the incumbent government by issuing bonds. Investments in basic and higher education have conflicting effects on future labour income distribution and net returns to these investments depend on the tax and transfers system being selected in the following period through the democratic process. Our idea is that public investment in basic education, by decreasing future labour income inequality, may induce future policy-makers to redistribute resources through financial rents taxation, thus making unfeasible the issuing of debt to finance basic education. This will be the more probable the greater wealth inequality is.