Using an instrumental variables strategy, we estimate the causal effect of income on children's math and reading achievement. Our identification derives from the large, nonlinear changes in the ...Earned Income Tax Credit. The largest of these changes increased family income by as much as 20 percent, or approximately $2,100, between 1993 and 1997. Our baseline estimates imply that a $1,000 increase in income raises combined math and reading test scores by 6 percent of a standard deviation in the short run. Test gains are larger for children from disadvantaged families and robust to a variety of alternative specifications.
Poverty, Inequality and Health: An International Perspective raises new and critical issues about health inequalities. It is unique in that it provides the first truly international perspective on ...this problem, with contributions from the developed and developing world. The outcome of a Public Health Forum organised by the London School of Hygiene and Tropical Medicine, this book brings together material from internationally recognised contributors from a wide range of disciplines and countries. The chapters reflect this diversity, ranging from the micro- to the macro-level, from aetiology to intervention. Topics covered include: the over-arching concepts linking economic and social forces and health status the extent to which ethical concerns lie at the heart of the issue of inequalities in health and attempts to ameliorate them; macro-level features of inequalities in health within and between countries; an overview of the main body of work on inequalities in health in developed countries and those in transition within Europe; specific pathways and mechanisms at the individual level that link poverty and inequality to health status; the interaction of social and biological influences on health status throughout life; specific disease-specific links; and issues of policy and interventions aimed at reducing inequalities in health. The book brings together people from very varied disciplines to discuss an area of clear international interest and global importance. As such it will be of value to the broad public health audience as well as research epidemiologists, international policy analysts and policy makers and those concerned with economic development and health. Available in OSO: http://www.oxschol.com/oso/public/content/publichealthepidemiology/9780192631961/toc.html
This paper estimates taxable income responses using a series of Danish tax reforms and population-wide administrative data since 1980. The tax variation and data in Denmark makes it possible to ...overcome the biases from nontax changes in inequality and mean reversion that plague the existing literature. We provide compelling graphical evidence of taxable income responses, arguably representing the first nonparametrically identified evidence of taxable income elasticities using tax reforms. We also present panel regression evidence that is extremely robust to specification, unlike previous results which have been very sensitive.
Raghuram Rajan was one of the few economists who warned of the global financial crisis before it hit. Now, as the world struggles to recover, it's tempting to blame what happened on just a few greedy ...bankers who took irrational risks and left the rest of us to foot the bill. InFault Lines, Rajan argues that serious flaws in the economy are also to blame, and warns that a potentially more devastating crisis awaits us if they aren't fixed.
Rajan shows how the individual choices that collectively brought about the economic meltdown--made by bankers, government officials, and ordinary homeowners--were rational responses to a flawed global financial order in which the incentives to take on risk are incredibly out of step with the dangers those risks pose. He traces the deepening fault lines in a world overly dependent on the indebted American consumer to power global economic growth and stave off global downturns. He exposes a system where America's growing inequality and thin social safety net create tremendous political pressure to encourage easy credit and keep job creation robust, no matter what the consequences to the economy's long-term health; and where the U.S. financial sector, with its skewed incentives, is the critical but unstable link between an overstimulated America and an underconsuming world.
InFault Lines, Rajan demonstrates how unequal access to education and health care in the United States puts us all in deeper financial peril, even as the economic choices of countries like Germany, Japan, and China place an undue burden on America to get its policies right. He outlines the hard choices we need to make to ensure a more stable world economy and restore lasting prosperity.
This paper estimates the dynamic effects of changes in taxes in the United States. We distinguish between changes in personal and corporate income taxes and develop a new narrative account of federal ...tax liability changes in these two tax components. We develop an estimator which uses narratively identified tax changes as proxies for structural tax shocks and apply it to quarterly post-WWII data. We find that short run output effects of tax shocks are large and that it is important to distinguish between different types of taxes when considering their impact on the labor market and on expenditure components.
The literature on the economics of happiness in developed economies finds discrepancies between reported measures of well-being and income measures. One is the so-called Easterlin paradox: that ...average happiness levels do not increase as countries grow wealthier. This article explores how that paradox—and survey research on reported well-being in general—can provide insights into the gaps between standard measures of economic development and individual assessments of welfare. Analysis of research on reported well-being in Latin America and Russia finds notable discrepancies between respondents’ assessments of their own well-being and income- or expenditure-based measures. Accepting a wide margin for error in both types of measures, the article posits that taking such discrepancies into account may improve the understanding of development outcomes by providing a broader view on well-being than do income- or expenditure-based measures alone. It suggests particular areas where research on reported well-being has the most potential to contribute. Yet the article also notes that some interpretations of happiness research—psychologists’ set point theory, in particular—may be quite limited in their application to development questions and cautions against the direct translation of results of happiness surveys into policy recommendations.
Capital in the Twenty-First Century by Thomas Piketty provides a unified theory of the functioning of the capitalist economy by linking theories of economic growth and functional and personal income ...distributions. It argues, based on the long-run historical data series, that the forces of economic divergence (including rising income inequality) tend to dominate in capitalism. It regards the twentieth century as an exception to this rule and proposes policies that would make capitalism sustainable in the twenty-first century.
Inequality in the long run Piketty, Thomas; Saez, Emmanuel
Science (American Association for the Advancement of Science),
05/2014, Volume:
344, Issue:
6186
Journal Article
Peer reviewed
This Review presents basic facts regarding the long-run evolution of income and wealth inequality in Europe and the United States. Income and wealth inequality was very high a century ago, ...particularly in Europe, but dropped dramatically in the first half of the 20th century. Income inequality has surged back in the United States since the 1970s so that the United States is much more unequal than Europe today. We discuss possible interpretations and lessons for the future.
Closing the Coverage Gap Holzmann, Robert; Robalino, David A; Takayama, Noriyuki
2009, 06-16-2009, 20090101
eBook, Book
Open access
Closing the Coverage Gap discusses how social pensions and other retirement income transfers can be used to close the coverage gap of mandatory pension systems. The book is organized in three parts. ...The first part makes the case for these programs by assessing the extent of the coverage gap around the world and evaluating the vulnerability to poverty of the elderly. The second part reviews the experiences of low, middle and high income countries with the design and implementation of retirement income transfers. The last part focuses on design issues. It analyses the incentive effect of these programs on labor supply and savings, fiscal costs, the role of targeting mechanisms, and alternatives in terms of institutional design and administration. The book also discusses the role of promising instruments such as matching contributions to reach parts of the informal sector.
We analyze randomized online survey experiments providing interactive, customized information on US income inequality, the link between top income tax rates and economic growth, and the estate tax. ...The treatment has large effects on views about inequality but only slightly moves tax and transfer policy preferences. An exception is the estate tax—informing respondents of the small share of decedents who pay it doubles support for it. The small effects for all other policies can be partially explained by respondents' low trust in government and a disconnect between concerns about social issues and the public policies meant to address them.
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