Minimum wage or negative income tax: why skilled workers may favor wage rigidities

In this article, we analyze the political choice of the extent and means of income redistribution between high and low-skilled workers. Redistributive tools encompass both fiscal transfers (a negative income tax) and a minimum wage requirement. We assume the use of fiscal instruments alone to be the first-best means of redistribution. We show that high-skilled workers may favor a second-best, minimum wage requirement because it increases unemployment, hence raising the marginal cost of redistribution, and creates a justification for them to moderate low-skilled workers’ claim for redistribution.      

Labor supply in urban China

Using labor supply responses from 10,560 urban Chinese workers, two-stage least squares estimations identify positive compensated wage effects and negative income effects that are, for the most part, statistically significant. The gross wage effects are mostly positive but they indicate relatively low uncompensated labor supply elasticities. The compensated wage effects are much larger; these may be important in assessing the labor market consequences of reform policies that monetize non-pecuniary benefits. The significance of labor supply responses depends on individual responsibilities within the family; the effects are largest for women and non-household heads. Journal of Comparative Economics 31 (4) (2003) 795–817.     

Income inequality, democracy and growth reconsidered

Persson and Tabellini (Persson, T., Tabellini, G., 1992a. Growth, distribution and politics. Eur. Econ. Rev. 36, 593–602; Persson, T., Tabellini, G., 1992b. Growth, distribution and politics. In: Cukierman, A., Hercowitz, Z., Leiderman, L. (Eds.), Political Economy, Growth, and Business Cycles. MIT Press, Cambridge, MA, pp. 3–22; Persson, T., Tabellini, G., 1994. Is inequality harmful for growth? Am. Econ. Rev. 84, 600–621) as well as Alesina and Rodrik (Alesina, A., Rodrik, D., 1992. Distribution, political conflict, and economic growth. In: Cukierman, A., Hercowitz, Z., Leiderman, L. (Eds.), Political Economy, Growth, and Business Cycles. MIT Press, Cambridge, MA, pp. 23–50; Alesina, A., Rodrik, D., 1994. Distributive politics and economic growth, Q. J. Econ. 109, 465–490) have argued that income inequality reduces economic growth rates among democracies because it promotes distributional struggles. In this paper I question the supportive evidence for a number of reasons. Measures of income distribution and democracy are unreliable and permit only very tentative conclusions. Changes in data sources or recoding of some influential cases affect results. It is questionable whether equality effects on growth apply only within democracies, as a median voter interpretation of this relationship should make one expect. The general idea that distributional struggle hurts the growth prospects of nations, however, receives some empirical support.     

Trade and financial liberalization with asymmetric information in bank financing

We investigate trade and financial openness in a small developing country where entrepreneurs need bank financing to operate in an import‐competing sector but banks do not observe their ability. This informational asymmetry causes adverse selection of low‐ability individuals into entrepreneurship and also prevents poor but able individuals from being entrepreneurs. We find that trade opening improves national welfare, but a tax is needed on foreign financial capital. Trade opening reduces an income gap between the rich and the poor, while financial opening affects this income gap ambiguously.     

城乡居民家庭收入流动与长期收入均等

运用相对收入流动指标及绝对收入流动指标对1989—2004年间各时期城市与农村家庭的收入流动性进行分析,我们发现:1989—2004年间各时期内城市与农村家庭的平均收入增长速度从低收入组到高收入组逐层递减。城乡居民收入流动性都处于较高的水平,与城市相比较,农村贫穷阶层家庭的收入向上的流动性要大于城市的贫穷家庭。低收入阶层向上的收入流动以及高收入阶层向下的收入流动使得1989—2004年间各时期城市与农村家庭的长期收入差距得到了缓解。