IN-KIND VERSUS CASH TRANSFERS IN THE PRESENCE OF DISTORTIONARY TAXES

In-kind transfers can Pareto-dominate cash transfers as a means of income redistribution if in-kind transfers and leisure are Hicks substitutes and leisure is a normal good. The result holds when redistributive instruments also include a linear income tax. The paper proves that if the poor receive more in-kind transfers (and the rich less) than what they would choose for themselves then, compared to cash transfers, there will be a higher labor supply by the poor, a lower labor supply by the rich, and higher levels of aggregate pre-tax income and tax revenues.     

Understanding the workweek of foreign born workers in the United States

I analyze the length of the workweek of foreign-born workers in the US I concentrate on workers supplying long hours of work—50 or more weekly hours and document that immigrants are less likely than natives to work long hours. Surprisingly, these differences are greatest among highly educated and salary paid workers, and persists even after conditioning for demographic characteristics. I explain these differences with two within occupation characteristics. First, relative to natives, immigrants are less likely to supply long work weeks if they work in occupations where the immigrant-native earnings differential is big. Second, immigrants are also less likely to supply long work weeks when they work in occupations with a wide dispersion of earnings. This second result is important, because the occupation dispersion of earnings has been used to characterize changes of the worker’s earnings over the worker life cycle (Bell and Freeman, Labour Economics: 8(2), 2001a; Working Time in Comparative Perspective, 2001b; Kuhn and Lozano, Journal of Labor Economics:26(2), 311–344, 2008), and a good measure of the incentives to supply long hours of work.     

Income tax schedule and redistribution in direct democracies – the Swiss case

This study examines redistribution policy through personal income taxes in Swiss cantons over the period 1995–2011. In a first step, redistribution measures are estimated with the help of exhaustive administrative data. Redistribution is decomposed into average tax rate and tax progression. In a second step, we investigate the impact of direct democratic institutions and their usage on tax policy and redistribution. The results suggest that the effect of direct democracy on income tax redistribution is a multilayered process. First, the theoretical availability of direct democracy tools does not seem to have the same impact as the effective use of them. Second, fiscal referendums may – in the short term –reduce redistribution through lower tax rates and lead to less tax progression. Third, an increasing number of ballots on initiatives leads to more tax progression and more redistribution in the long run. It seems that the short-term dampening effects of fiscal referendums on redistribution may be overridden in the long run by the expansive effect of popular initiatives.     

The Fabric of Life

ABSTRACT

This article presents a new methodology that brings together the life cycles of people and linen with seasonality to explore how these factors affected domestic practice. This juxtaposition enables an exploration of the temporal nature of the home: life cycle and seasonality influenced the work that people did, when they did it, and how much time they spent on a particular task in a year. Temporal patterns are explored through the analysis of linen, an eighteenth-century daily necessity for rich and poor alike. The provisioning and care of linen was an essential domestic task; the whiteness of a shirt signified its owner's respectability. The account book of Richard Latham, a plebeian farmer, is used to develop the approach. Latham, from Scarisbrick, Lancashire, kept an account book from 1723 to 1767. The impact of life cycle and seasonality on the Lathams' domestic practice is explored through the growing, dressing, spinning, bleaching, and washing of linen.     

Inequality,ethnic diversity,and redistribution

Seminal political economy models from Meltzer and Richard, among others, theorize that, in democracies, more inequality should lead to more redistribution. Most country-level empirical studies find weak support for this prediction. This paper makes two contributions to this debate. First, I identify some of the key shortcomings of previous tests and provide a new empirical analysis that corrects for these limitations. Using a dataset covering 89 developed and developing democracies, I find that inequality is associated with more redistribution. Second, I show that inequality’s effect on redistribution is weaker in democracies in which the poor – defined as the people with income below the median – are divided along ethnic lines than in those in which they are ethnically unified. Taken together, these results suggest that although economic inequality increases redistribution, the magnitude of the relationship is conditional on how inequality interacts with other social cleavages, such as ethnicity.     

Voting on redistribution with tax evasion

This paper analyzes voting on a linear income tax whose proceeds are redistributed lump sum to the taxpayers. Individuals can evade taxes, which leads to penalties if evasion is detected. Since preferences satisfy neither single peakedness nor single crossing, a voting equilibrium may not exist. When an equilibrium does exist, there are several possible outcomes. There may be ‘conventional’ equilibria where the rich are expropriated by the poor and middle class. There may be equilibria without full expropriation where redistribution is limited by the threat of evasion. Finally, there may be equilibria where redistribution goes from the middle class to the rich and poor.     

A Tax and Redistribution Experiment with Subjects that Switch from Risk Aversion to Risk Preference

Bénabou and Ok use expected utility to argue the prospect of upward mobility (POUM) may cause majority rejection of redistributive taxes that benefit the majority. They believe the poor are not risk seeking but instead believe they may soon be rich. In paid computerized experiments that allows redistribution the poor are risk seeking and the rich risk averse even though subjects play both roles. Changing risk attitudes with wealth levels is predicted by Kahnemann and Tversky (Econometrica 47(2):263–291, 1979). Rounds that mimic actual middle class decisions produce desired tax rates over 50% suggesting POUM is only a partial explanation for low taxes.Professor Zheng made the original suggestion to do experiments on the POUM hypothesis. W. James Smith suggested using parameters from real societies.     

Crowding-out in savings decisions,portfolio default adoption and home ownership: evidence from the Chilean retirement system

This paper studies crowd-out effects across choices regarding different sources of investment and savings in the Chilean pension system (e.g., voluntary savings within and outside the retirement system, housing status, and default portfolio adoption). Because preferences over choice sets are unobserved and it is expected that individual unobserved characteristics may be correlated across decisions, I jointly estimate a dynamic reduced-form life cycle model of wealth accumulation. Simulation results indicate no short- or long-run crowd-out effects across voluntary savings accounts within and outside the retirement system. There is evidence that in the short run, there is crowding-out between mandatory savings and other forms of investments, such as home ownership or savings in the financial-banking sector. Results also show that in the long run, individuals treat home ownership and participation in voluntary retirement programs as substitute goods. Finally, the long-run effects of participating in voluntary savings programs are important in increasing active participation in portfolio decisions.

     

“Left Behind?” Financialization and Income Inequality Between the Affluent,Middle Class,and The Poor

There is increasing scholarly evidence that financialization has contributed to rising income inequality, especially by concentrating income among the affluent and rich. There is less empirical research examining who is losing out to the affluent. This paper fills this gap by examining how three measures of financialization (finance, insurance, and real estate or FIRE employment; credit expansion; and financial crises) affect upper-tail (measured as the ratio between the 90th and 50th income percentiles) and lower-tail (measured as the ratio between the 50th and 10th income percentiles) income inequality. Using concepts from economic sociology and the social stratification literature, I develop a perspective that links financialization to income inequality by creating more unequal market incomes while simultaneously reducing redistribution and social transfers. I analyze disposable household income data (after taxes and transfers) from the Luxembourg Income Study (LIS) and other public sources like the OECD from 16 affluent nations between the years 1981 and 2011, and I use an unbalanced panel design due to LIS data coverage. I find that the relative incomes of both the middle class and the poor are hurt by financialization (strongest evidence tied to FIRE employment); however, relative incomes of the poor are especially sensitive to financialization.     

明朝服饰体现的等级差别

衣食住行，以衣为首。自古以来，服饰就是人们最为关注的生活必需品之一。所谓“衣披天下”、“衣锦还乡”都说明了中国服饰的历史悠久和业绩辉煌。在古代社会，统治阶级为巩固自身地位，把服饰的实用功能深化到更高级别的功能，服饰除能蔽体外，还被当做分贵贱、别等级的统治工具，成为等级社会鲜明的形象代言人。     

Presidential Address: The Faculty Time Divide

The time demands of academic life are examined, drawing on data from a large national sample of faculty. I outline the divide between full-time faculty, who work long hours irrespective of rank or institution type, and part-time faculty, who work at low pay with little job security, status, recognition, or fringe benefits. The expectations of academic life in dual-career couples are hard to reconcile with the demands of parenting. This is a common problem because assistant professors are generally too old to wait until they have tenure to have children. The segmentation of academic life into an overworked core and a marginalized periphery tends to perpetuate gender inequality.     

Civic life in Gray Mountain: sizing up the legacy of New England’s blue-collar middle class

When President Clinton took Congressional and business leaders on a tour early this summer to places where chronic poverty has persisted despite the nation’s booming economy, they visited Appalachia’s coalfields, the Mississippi Delta, the Pine Ridge Indian reservation and inner-city neighborhoods in East St. Louis and Los Angeles. They did not visit New England. Not that New England’s inner cities aren’t plagued with poverty and social problems; they are. And many poor families are struggling to get by in rural Maine, New Hampshire, and Vermont. Yet the notoriously bad conditions that took the president to the nation’s “poverty pockets” are exceedingly rare in the six-state region. Why? Why have poverty rates stayed so high in the South compared with New England? And what can the region expect in the future?The answers lie in the kind of civic culture generated by each community’s economy and social structure. Chronically poor places are divided by race and class and saddled with corrupt politics, ineffective schools, and self-interested elites. Distrustful of one another, people in these places look out only for their own families. Escaping poverty is possible only for the lucky few who have a kind relative, caring teacher, or coach who pushes and inspires them to finish school and aim high. But most stay trapped in the same poor conditions their parents and perhaps grandparents knew.In contrast, when communities have a large middle class, the poor are less likely to be cut off from the mainstream. And they are more likely to have the set of contacts, habits and skills—the cultural tool kit—they need to leave poverty behind. More importantly, the community institutions that poor families rely upon are more likely to be effective because the middle class is committed to them. The poor can get ahead without relying solely on personal intervention from a mentor or other benefactor.During the 1990s, I studied poverty and community change in three remote, rural communities: a poor Appalachian coal county I call “Blackwell,” a poor Mississippi Delta plantation community I call “Dahlia” and a more stable and economically diverse northern New England mill community, “Gray Mountain.” The idea was to learn why poverty persisted generation after generation in Appalachia and the Delta, what made the difference when people did achieve upward mobility, and why it was so hard to bring about change. I examined 100 years of Census data detailing changes in population, patterns of work, income distribution and education. I read histories of each region, as well as the local weekly newspapers. But the heart of the study is the 350 in-depth interviews colleagues and I conducted with people living in these communities—not only the poor, but also the rich and those in between. These open-ended conversations revealed how each community’s civic culture—its level of trust, participation and investment—shapes opportunities for both individual mobility and social change.     

Do the rich save more in Latin America?

This paper reports evidence that the savings rate of the rich is higher than that of the poor in Brazil, Chile, Costa Rica, Ecuador, Honduras, Mexico, Panama, Paraguay and Peru. On average, the difference between the fifth and fourth income quintile groups is 7 percentage points. No differences between income groups are found in Uruguay and the results for Argentina and Colombia are not robust to estimation alternatives. The key methodological step is to construct a measure of lifetime income. Current income is not a good proxy since it is affected by phases of the life cycle and transitory shocks. We implement a two-stage procedure based on the education level of the household head and the education level of his/her partner. Several robustness exercises are reported for different age groups, inclusion/exclusion of outliers and for a wealth index based on homeownership, home appliances and other household owned assets.     

Personal Authority via Termination of the Intergenerational Hierarchical Boundary: A "New" Stage in the Family Life Cycle

This paper proposes a stage in the family life cycle, occurring in the fourth decade of life, the goal of which is to terminate the hierarchical boundary between the adult client and the older parents. This requires a radical renegotiation of the power structures in the relationships between the two generations, and in the interactional political patterns which ensue from these. The essence of the process is a redistribution of power in the direction of equality, with the intention of establishing a peer relationship between the first and second generations in the three generational family cycle. This experience is understood to be power politics at the source.     

On the influence of a ranking system

Ranking systems are becoming increasingly important in many areas, in the Web environment and academic life for instance. In a world with a tremendous amount of choices, rankings play the crucial role of influencing which objects are tasted or selected. This selection generates a feedback when the ranking is based on citations, as is the case for the widely used invariant method. The selection affects new stated opinions (citations), which will, in turn, affect the next ranking. The purpose of this paper is to investigate this feedback in the context of journals by studying some simple but reasonable dynamics. Our main interest is in the long run behavior of the process and how it depends on the preferences, in particular on their diversity. We show that multiple long run behaviors may arise due to strong self-reinforcing mechanisms at work with the invariant method. These effects are not present in a simple search model in which individuals are influenced by the cites of the papers they first read.     

Poverty talk: how people experiencing poverty deny their poverty and why they blame ‘the poor’

Drawing on life history interviews with sixty men and women in north‐east England who were caught up in ‘the low‐pay, no‐pay cycle’, this article describes how people living in poverty talk about poverty – in respect of themselves and others. Paradoxically, interviewees subscribed to a powerful set of ideas that denied poverty and morally condemned ‘the poor’. These findings are theorized in four ways: first, informants deployed close points of comparison that diminished a sense of relative poverty and deprivation; second, dissociation from ‘the poor’ reflects long‐running stigma and shame but is given extra force by current forms of ‘scroungerphobia’; third, discourses of the ‘undeserving poor’ articulate with a more general contemporary prejudice against the working class, which fuels the impetus to dissociate from ‘the poor’ (and to disidentify with the working class); and fourth, the hegemonic orthodoxy that blames ‘the poor’ for their poverty can more easily dominate in contexts where more solidaristic forms of working‐class life are in decline.     

“I Stay by Myself”: Social Support,Distrust, and Selective Solidarity Among the Urban Poor

Significant debate exists about whether the black urban poor rely on each other for support. Currently, two perspectives dominate: the pervasive solidarity perspective, which asserts that support is widespread in poor, black communities, and the distrust‐individualism perspective, which claims that, in these communities, pervasive distrust undermines social cohesion and people use individualistic strategies for solving problems. Based on fieldwork in an African American public housing development, I present the concept of selective solidarity, which suggests that social life in these communities is neither as cohesive nor as individualistic as what past perspectives suggest. With selective solidarity, people rely on one another for support but selectively choose exchange partners, restricting exchange networks. Selective solidarity helps us understand how people manage sentiments of distrust while developing strategies for coping with material deprivation. Findings also have implications for the study of urban poverty. While my informants frequently stated that they “stay by themselves,” which implies individualism, they actually have meaningful exchange relationships. I argue that this contradiction suggests that they have multiple frames for approaching social life. We must consider such frames to avoid drawing misinformed conclusions, such as that the urban poor do not have supportive relationship when in fact they do.     

Do what (you think) the rich will do: Inequality and belief heterogeneity in public good provision

Beliefs about others’ cooperativeness are among the strongest determinants of cooperative behaviours. Beliefs about different others, however, are not necessarily uniform, nor necessarily related to past behaviours: Different expectations about different others might solely originate from differences in observed individual characteristics. Finally, not all such beliefs need drive conditional behaviour alike.In a public good game with heterogeneous endowments, I find that rich subjects are expected to cooperate more by both rich and poor individuals, and that behaviours of both the rich and poor correlate only with beliefs about the rich. An intervention aimed at increasing perceived group cohesion has no impact on beliefs and mixed impacts on cooperation. I conclude with implications for information dissemination about uncooperative behaviour in the mass media and avenues for further research.     

ENFORCEMENT COSTS and THE CHOICE OF POLICY INSTRUMENTS FOR CONTROLLING POLLUTION

Economic incentive based policies have long been advocated for controlling pollution because they can minimize firms' abatement costs. However, the social costs of controlling pollution consist not only of abatement costs but also enforcement costs. I show that the conditions for minimizing abatement costs and minimizing enforcement costs differ. As a result, enforcement costs can be higher for incentive based policies than for policies based on direct controls. A complete evaluation of alternative policies requires a comparison of both abatement and enforcement costs.     

On Prejudice and Socialization: Towards Social Work Action

I begin with the assumption that discriminatory attitudes and behaviour between person and person, group and group, nation and nation, are undesirable. They are undesirable for a number of reasons: the first, that they tend to weaken and fragment the culture-cradle of identity formation in the discriminated-against group, or alternatively that they lead to a defensive in-grownness in that culture which may have a number of consequences—a tight constriction of identity development, or an over-investment in the culture which may lead to isolation and impoverishment in the long run, or defensive projection at the group level on to the dominant culture with the possibility of covert or overt fear or war.