We study the impact of endogenous longevity on optimal tax progressivity and inequality in an overlapping generations model with skill heterogeneity. Higher tax progressivity decreases both the ...longevity gap and net income inequality, but at the expense of lower average lifetime and income. We find that the welfare-maximizing income tax is less progressive in our model with endogenous longevity than in our model with exogenous longevity. In a highly stylized calibration of the US economy, we show that optimal tax progressivity is less than what prevails under the current US tax system. Our results are robust to the range of empirical labor supply elasticity and the assumptions of missing annuity markets and stochastic health. Our conclusion for the optimal progressivity of the US tax system can be altered by the adoption of a more egalitarian welfare function or by increases in prevailing levels of wage inequality.
A multi-faceted program comprising a grant of productive assets, training, unconditional cash transfers, coaching, and savings has been found to build sustainable income for those in extreme poverty. ...We focus on two important questions: whether a mere grant of productive assets would generate similar impacts (it does not), and whether access to a savings account with a deposit collection service would generate similar impacts (it does, but they are short-lived).
•We study a multi-faceted program to alleviate poverty.•Please see abstract.•Summary of key results there.
People on low-incomes in the UK develop multiple long-term health conditions over 10 years earlier than affluent individuals. Financial diaries -new to public health- are used to explore the lived ...experiences of financially-vulnerable individuals, diagnosed with at least one long-term condition, living in two inner-city London Boroughs. Findings show that the health status of these individuals is a key barrier to work opportunities, undermining their income. Their precarious and uncertain financial situation, sometimes combined with housing issues, increased stress and anxiety which, in turn, contributed to further deteriorate participants’ health. Long-term health conditions limited the strategies to overcome moments of financial crisis and diarists frequently used credit to cope. Restrictions to access reliable services and timely support were connected to the progression of multiple long-term conditions. Models that integrate healthcare, public health, welfare and financial support are needed to slow down the progression from one to many long-term health conditions.
Income taxation affects individuals' incentives to work, save, and take risks. These behavioural responses to taxation is key to evaluating efficiency cost of taxation. Especially, the response of ...rich individuals to taxation is important because of their impact on the tax revenue and on the economy. In this paper, I analyse the response of Major League Baseball players to the increase in the top tax rate due to the American Taxpayer Relief Act of 2012. Using difference-in-differences estimation applied to the players with different years of free agent contracts, I do not find any negative effect of the tax increase on the players' performance.
Income distribution and environmental degradation represent two of the most important goals in the SDGs (Sustainable Development Goals). However, the linkage between income inequality and carbon ...emissions remains controversial. Relying on a large set of cross-country panel data (217 countries from 1960 to the latest), this paper contributes to the literature by using the instrumental variable approach to estimate the causal impact of income inequality on carbon emissions and exploring the underlying transmission mechanisms. Our modelling results indicate that there is a trade-off between income inequality and CO2 emissions. And the underlying mechanisms include (1) diminishing marginal propensity to emit (DMPE) coupled with the economic law of diminishing marginal propensity to consume (DMPC); (2) high income inequality induces increases in R&D expenditure, leading to reductions in CO2 emissions; (3) political freedom does not significantly affect the relationship between income inequality and CO2 emissions.
•This paper estimates the impact of income inequality on carbon emissions and exploring the underlying transmission mechanisms, relying on panel data across 217 countries from 1960 to the latest.•Baseline and IV estimation results suggest that there is a trade-off between income inequality and CO2 emissions.•Political freedom does not significantly affect the relationship between income inequality and CO2 emissions.•Rising shares of low-income groups lead to higher CO2 emissions while rising shares of high-income groups contribute to lower CO2 emissions.•Rising income inequality can decrease energy consumption and increase R&D expenditure, which in turn help to decrease CO2 emissions.
This paper examines the role of financial development on U.S. state-level income inequality in the 50 states from 1976 to 2011, using fixed-effect estimation. We find robust results whereby financial ...development linearly increases income inequality for the 50 states. When we divide 50 states into two separate groups of above-average and below-average inequality states than the cross-state average inequality, the effect of financial development on income inequality appears non-linear. When financial development improves, the effect increases at an increasing rate for above-average income-inequality states, whereas an inverted U-shaped relationship exists for below-average income-inequality states. To our knowledge, this paper is the first to examine the role of financial development on U.S. state-level inequality.
The objective of this paper is to perform a time series econometric analysis in order to empirically assess the macroeconomic determinants and the corresponding drivers of Portuguese households' ...indebtedness in the period 1988 to 2016. During that period, the Portuguese economy experienced a process of financialisation that contributed to an increase in Portuguese households' indebtedness to unprecedented levels. The Portuguese households' indebtedness played a crucial role in the recent sovereign debt crisis. Based on the existing literature, we hypothesise that Portuguese households' indebtedness was due to seven macroeconomic determinants, notably housing prices, financial asset prices, the degree of personal income inequality, households' labour income, the importance of welfare state expenditures, the fraction of the working‐age population and the level of interest rates. Our findings reveal that the housing prices busts, financial asset prices, the degree of personal income inequality, households' labour income and the fraction of the working‐age population positively impact Portuguese households' indebtedness. Our findings also show that the increase in financial asset prices and the decline in housing prices were the main drivers of Portuguese households' indebtedness in the last few decades.
Degrowth and the State D’Alisa, Giacomo; Kallis, Giorgos
Ecological economics,
03/2020, Volume:
169
Journal Article
Peer reviewed
•Degrowth scholarship lacks a theory of the state.•A theory of political change cannot but deal with the state.•Gramsci inspired framework overcomes the dichotomy between grassroots activism and ...policies.•A Gramscian theory allows to articulate coherently symbiotic and interstitial strategies for transformation.
This paper addresses a gap in degrowth scholarship: the lack of a theory of the state. Those who write about degrowth advocate radical policy and social change, but have no model to explain how, why and under what conditions such change could come about and what role the state would play in it. This is because they have no theory of what the state is, or when and why it changes. We review for the first time the Anglophone and Francophone literatures on state and degrowth and find both wanting. We propose a Gramscian theory of the state suitable for thinking about degrowth and show with the example of strategizing for a maximum income policy how this suits the degrowth literature’s emphasis on a combination of grassroots and institutional actions.
We study the efficacy of nonrefundable tax credits for charitable donations in Canada. Using an instrumental variables estimator with a large longitudinal administrative data set, we estimate the tax ...price elasticity of giving. We estimate the tax price elasticity of giving for all tax filers and within quintiles of the distribution of household income. Our full sample elasticity estimate is −1.9, but we find evidence of larger estimates at the bottom of the distribution near −3 and −4. At the top quintile, we estimate this elasticity closer to −1. We find evidence throughout the distribution of income that the response to tax price occurs on both the decision to give or not and how much to give.
This paper aims to understand whether a shift towards a more balanced cash transfer and service-based welfare system is valuable in terms of reducing income inequality and what factors mostly ...contribute to the income inequality evolution. To examine this, I first impute the monetary values of in-kind benefits and then reassess Gini coefficients across countries and welfare regimes. I also compare the role of cash transfers by functions and, more importantly, by how they are allocated. By means of factor source decomposition, the elasticities confirm wages as being the income source that creates most inequalities, while taxes play the most equalising role together with cash transfers. However, universal services such as healthcare and compulsory education outperform most of the cash transfers included in the analysis, with a stronger effect in the Mediterranean countries. Although in-kind services play a marginal role in explaining the changes in the Gini coefficient between 2008 and 2017, results suggest that a coordinated view of cash transfers and public services, as well as increasing the share of non-contributory means tested transfers, can reduce income inequality in all welfare regimes.
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