Search Results

Explores the effects of moves from dirigiste to laissez‐faire policies (liberalization) on income distribution within countries, and also to consider briefly its impact on inter‐country inequality. The emphasis is on inequality within countries because this is where world inequalities have been most exacerbated over the past two decades. In itself, this represents an important change in inequality in world politics. The gap between rich and poor has long been the major source of inequality among people in the world. Yet this gap has, if anything, closed slightly over the past couple of decades. In particular, the chapter demonstrates that over the 1980s inequalities within countries generally tended to worsen—more so than in any previous post‐WW2 decade—and argues that if intra‐country distribution had remained the same over the 1980s, inter‐country inequalities would have been reduced.

This chapter shows how economic growth over the last two business cycles has been distributed in the United States, and compares those changes with changes in two EU countries with quite different social Institutions: Great Britain and Germany. While income inequality is consistently highest in the United States over the past two decades, followed by Great Britain and Germany, income inequality in the United States changed little in the 1990s, fell in Great Britain, and rose in Germany. Outcomes in Great Britain over the 1990s business cycle are much closer to those in the United States than they are to Germany.

This chapter assesses the impact of capital formation and economic development under Japanese rule on income distribution, consumption (standard of living), and savings in Korea, focusing those of Koreans and Japanese in Korea. This allows the evaluation of the ultimate beneficiaries of economic growth and transformation in the country relative to various economic sectors (e.g., industry and agriculture), income groups (e.g., landlords, farmers, businesses, and wage earners), and different nationalities (i.e., Koreans and Japanese). Similar analyses have been performed relative to personal consumption and savings, as well as business savings based on economic/income sectors/groups and nationality.

This chapter analyzes Mincer's contribution to income distribution research, namely the way he placed human capital at the center of that research. It commences with a brief analysis of the debates that marked the development of research in personal income distribution during the first half of the 20th century. Mincer's thesis of 1957 is analyzed by showing how his work incorporated a broader debate about the purposes and uses of research in personal income. The chapter proceeds by covering Mincer's subsequent work on human capital and lifetime income and wage patterns, which reached a high point with his 1974 book Schooling, Experience, and Earnings and the formulation of the human capital earnings function, which would become a centerpiece of modern labor research. The chapter also shows the way Mincer's research has significantly influenced the economic analysis of income distribution.

This chapter argues that in thinking about income inequality, our focus should be on the distribution of post-tax-post-transfer income among households, rather than the distribution of earnings among individuals or the distribution of market income among households. It explores the chief determinants of cross-country and over-time differences in post-tax-postt-ransfer household income inequality. It examines the impact of individual earnings, employment patterns within and across households, household composition and structure, and government redistribution. It is shown that for the countries that have been most successful at limiting inequality, redistribution has been especially significant. Keeping individual earnings inequality in check is likely to be increasingly difficult and that household structure and composition are very difficult for policy makers to influence.

Describes the distribution of income and trends in it over time. Sets out what proportions of the population have incomes at different levels, and which groups are found towards its top and bottom. Describes how income inequality has changed in recent decades, and how these trends contrast with those in other comparable countries, most of which have not experienced as sharp an increase as Britain. Also gives information about the distribution of wealth, and the way it has also become more unequally distributed in the most recent years. Finally, looks at public views of inequality in the UK, and at how these match or contrast with those in other countries.

This chapter addresses the question of how the resources of labour power are supplied to alternative uses from the neoclassical viewpoint of individual rational choice, and further explains various modifications made to the framework of analysis, which are designed to cope with circumstances peculiar to the labour market that cannot be handled well in a standard framework of market clearing. Section 3.1 formulates the theory of general equilibrium for an economy with heterogeneous abilities and heterogeneous jobs, and derives some fundamental properties governing the distribution of income; in particular, it answers the supply‐side questions of how people's diverse abilities are allocated to different job types and how people's preferences for types of job affect such a process; and discusses implications of these on the size distribution of income. Section 3.2 discusses the possibility that each person's ability might change over time, in particular that it might be modified into a more valuable one at the expense of economic resources. Section 3.3 discusses the types of labour market equilibrium that obtain when each person's ability is imperfectly revealed––more specifically, asymmetry of information exists between the workers and the employer in that every worker knows his or her ability perfectly well while the employer cannot observe it directly. Section 3.4 again discusses the implications of informational imperfection, but this time imperfection falls equally (or symmetrically) on workers and employers.

Discusses the fact that although income distribution and the distribution of educational attainments are obviously related, the sign of the relationship between educational achievements and income inequality cannot be predicted a priori . For this reason, the chapter investigates the empirical determinants of aggregate income inequality and, more specifically, the relative contribution of education to measured income inequality. Checchi considers this to be crucial for two reasons: first, from a theoretical point of view, it is important to understand the plausibility of studying intergenerational equilibria under stationary distributions of income and human capital in the population; second, from a policy point of view, it is important to understand whether urging countries (or people) to increase their educational achievements is going to exacerbate, moderate, or have little influence on the subsequent earnings distribution. The chapter is organized as follows: the second section reviews the literature on income inequality determinants, the third provides an empirical econometric analysis, and the last offers conclusions; an appendix indicates data sources and discusses data reliability.

Inequalities and poverty matter in both poor and rich countries. Whereas inequality and poverty manifest themselves in a variety of dimensions, income is one of the most evident manifestations, and the one that better lends itself to periodic comparisons across countries and over time. Most people in OECD countries do care about income inequalities and are capable of articulating judgments on the shape of the income distribution. This chapter details the OECD's methods. The first section describes the history of research in the OECD into income distribution and poverty dating back to the mid-1970s. It also discusses some of the methodological and conceptual choices that have been made to construct more comparable indicators. The second section reviews some of the main findings from Growing Unequal?, the latest OECD study. The third section considers the limits of the OECD approach and describes some of the steps that have, or could, be undertaken to overcome those.

Major improvements in the quality and frequency of data on income and consumption distribution in Latin American countries have provided an adequate base for assessing trends and analysing the factors (including policies) that have an impact on inequality, except in cases where conclusions are likely to depend substantially on the hardest-to-measure or least frequently measured components of income or consumption. These are capital income, accruing mainly to upper income groups (including income from the appreciation of assets), and consumption of public goods. Until household surveys are greatly improved from their present levels, other types of information will remain the main source on capital income, e.g., tax-related information. Arguably the highest potential payoff among the easily feasible improvements to the database on inequality is in the panel area, though success requires expertise inside or outside the data collection agency to keep it going. A major payoff to improvements in the information on inequality is the more efficient testing of hypotheses about the determination of distribution and its changes. Some of the required information is not related to distribution per se but rather to the phenomena whose causal links to inequality we seek to establish. Given the amount of information that falls in this category, some sort of rotating special module system is often called for. At this point it appears likely that extension of the distribution-relevant database in this direction is the highest priority in many countries.

Provides an overview of the changes in income distribution in developing and transition countries in recent decades, and assesses the incidence of taxes and government expenditure in these countries. For the overview of income distribution, the chapter relies largely on a set of newly available ‘high‐quality’ income‐distribution data. For the assessment of tax and government expenditure incidence, it relies on existing incidence studies on individual countries. The chapter has five sections: Introduction; The Role of Taxes and Social Spending; Selective Literature Survey—a survey of the studies on the incidence of taxes and expenditure, paying particular attention to the incidence of government spending on education and health, and reviewing the available evidence for a large number of developing countries; Role of Taxes and Government Social Spending Policy—this section offers an overview of the changes in income distribution in developing countries from the 1970s to the 1990s, with separate discussion of the nature of tax reforms and social expenditure policy and their distributional implications in selected countries (Hungary, Indonesia, and Thailand); and Summary and Conclusions.

The first part of Ch. 1 outlines the purpose and organization of the book. The second part provides an overview of the current labour participation structure, and of the structure and distribution of income and wealth in Japan. It also draws attention to the pitfalls that may arise in interpreting the data on these issues.

This chapter discusses the basic determinants of the generation of wealth and its distribution across households; it has four sections. Section 7.1 considers the life cycle motive as a basis of household saving behaviour, paying particular attention to the role played by the pension annuity system. Section 7.2 discusses the role of education in transmitting wealth between parents and children. Section 7.3 turns to the topic of macroeconomics and looks at how the rate of return is determined in the long term, thereby showing how the theoretical discussions in this book form a general equilibrium framework. Section 7.4 takes up the question of asset and related expectations––asset price fluctuation is considered one of the major causes of generation of huge wealth in the short term, but there are various conflicting dimensions to this problem.

Deals with the effects of income taxes on income distribution. It is widely believed that the individual income tax, with progressive tax rates, can reduce the inequality of income distribution or at least slowdown its growth. An attempt is made to correlate information about the redistribution effects of income taxes with the distribution of income.