Income Distribution

Perspectives on degree of economic openness have been discussed by different paradigms resulting in concluding remarks which differ widely from each other. However, the existing literature has passed over the importance of the relationship between economic openness and income distribution in relation to the bargaining framework and thus its effect on social solidarity. In this paper, the rationale is based on the argument that an increase in the degree of economic openness has a significant impact on the distribution of income through the channels of trade and financial account. The empirical results show that a more open economic environment leads to an unequal distribution of income, both reducing labor's share and increasing income inequality, through the collapse of bargaining power of labor in favor of capital across advanced economies over the 1996–2014 period. However, the results also suggest that the trade channel is a more effective influence on income distribution than the finance channel. Additionally, other globalization measures, including economic, social and political factors, also have negative effects on income distribution by way of reducing the bargaining power of labor, which results in the collapse of social solidarity and cohesion over time.

The determinants of the labor share of national income have been investigated by numerous studies. However, there is no consensus for what exactly affects the income differentials of workers, especially after the triumph of neoliberal policies prevailed after 1980s across all countries, including both developed and developing economies. While this is especially the critical issue for advanced countries, many developing economies have been noticed the importance of an increasing income gap between capital and workers. This paper seeks out the causes of a decreasing labor’s share in case of MENA countries, which are mostly classified as middle-income countries and are to a large extent categorized in developing group of countries, over the 1992-2013 period. To understand the reasons behind this decline in income shares of workers, the analytical context focuses on two major factors which are basically hinged on macro-level issues: (i) financial liberalization and (ii) financial development. The results show that financial liberalization is not sufficient for an increase in labor’s share but also the necessary level of development in financial markets and institutions should be implemented over time. In other words, in the context of selected MENA countries, the positive effects of financial liberalization on the labor share of income are only possible with a simultaneous increase in the degree of financial development in case of both depth, access, and efficiency.

When we analyse the attitudes towards poverty, we will not learn about the real causes of poverty nor about the appropriate means of fighting against it. We will know how different types of people think about these questions and – indirectly-what they are willing to do to decrease or put an end to it. Our attitudes help us to explain the world around us and to find our way in it; they also combine to construct our identity, to defend our ego in certain situations, to express ourselves. Attitudes are behind our acts, they are the mediators between our values and our behavior. In a lot of cases there is a discrepancy between our acts and our attitudes, nevertheless attitudes give orientation to the behavior. Based on the attitudes of people, we can predict what kind of social politics they will support, how they would help poor people if they are rich and how poor people try to break out of poverty-if they try it at all. In this paper I will show the attitudes of European people towards issues such as the definition and causes of poverty, its extension and the necessity, responsibility and means of fighting against poverty.

Income inequality has long been a frustrating feature of Malaysian economic development. The country income inequality, represented by the Gini Coefficient has decreased only slightly to 0.41 in 2014 from 0.51 in 1970. This income inequality, however, was accompanied by rapid economic growth. Gross Domestic Product (GDP) has grown by an average of more than 7 percent per year for 25 years or more. The expectations that the high economic growth would accompany low income inequality as hypothesized by the inverted ‘U-shaped’ Kuznets curve have not come true for Malaysia. Why did it occur? Unlike many other conventional studies which look at the relationship between growth and income inequality to explain this phenomenon; this study intent to looks at the foreign direct investment (FDI) relationship with income inequality. Since 1990s, FDI has been an important source of economic growth for Malaysia, bringing in capital investment, technology and management knowledge needed for economic growth. FDI had increased almost thirty-fold during 1970s to 2000s. There is a heated debate on the effects of FDI on income distribution. While FDI may have been good for development this masks the facts that not all types of workers necessarily gain from FDI to some extent. FDI induced skill specific technological change where it can be associated with skill-specific wage bargaining or skill-intensive sectors. This study presents an attempt to evaluate the impact of foreign direct investment (FDI) on income distribution among labors. The Malaysia’s Social Accounting Matrix (SAM) is constructed as a framework for the analysis. In this SAM the detail framework of the component of FDI in various sectors, production sectors and labour groups are essential to analyse different effects from different component of FDI on the labor’s income distribution among different labor group. This structure of SAM would answer the question of either and which component of FDI will benefit the most to the low income. The study finds that the FDI expansion has impacted negatively on the distribution of income across different labor groups, where it has increased the high-low or skilled-unskilled income inequality. It also indicates that there are differences in the composition of the FDI that impacts income distribution among labor. The apparent differences in the magnitude of the effects of the different FDI components suggests that variations in the FDI allocations among sectors should be considered as a possible policy variable to achieve income equality goals.

We quantify the effects on poverty and income distribution in Ecuador of bilateral trade liberalization with the US and a budget-neutral value added tax increase which seeks to compensate tariff revenue losses. We stress the study of fiscal policies that the government could tap in order to compensate for tariff revenue loss. This is a very important issue for Ecuador because this country adopted the US dollar as its currency in 2000, forgiving the use of important policy instruments. To study these issues we combine a reduced-form micro household income and occupational choice model (using 2005/6 data from the Ecuadorian LSMS) with a standard single-country computable general equilibrium model (employing a 2004 SAM). We follow a sequential approach that simulates the full distributional impact of trade and tax policies. We find that the impact of these policy changes on extreme poverty and income distribution is small but positive.

This paper aims to evaluate the relevance of different types of macroeconomic general equilibrium modelling for measuring the impact of economic policy shocks on the incidence of poverty and on the distribution of income. In the literature three approaches are identified. The first is ...

These weaknesses constitute the core arguments of Piketty’s critics. “Capital in the Twenty- First Century”, rigorous and compelling book that shifted the focus “of economic policy, towards distributional questions”, neglected to take into account noncash compensation and thus, some authors argue that, apart from the extended data researches, the result relied on distorting income inequality (Wall Street Journal, 2014). By demonstrating such a level of dogmatism and narrow-mindedness, his opponents might have missed the main role of Piketty, agent provocateur, “forcing us to think about new ideas and new possibilities” (Jones, 2015 p. 30).

The main objective of this paper is to examine the opportunities, difficulties andchallenges of an effective social protection for the elderly population. The articleemphasizes the public policies of income and long term care, as well as the family asthe main informal source of support to that population. It is assumed that the lack ofautonomy to deal with the activities of the daily life and the lackness of income arethe main determinants of the "dependence" of the aged ones. The information usedare obtained from some demographic census and the Brazilian National HouseholdSample Survey [Pesquisa Nacional por Amostra de Domicilios (PNAD)].One of the conclusions is that in the micro level, the degree of dependence ofthe aged individuals is, in large deal, determined for the provision of income from theState. This suggests that when it reduces or increases social security benefits, the Stateis not only affecting individuals, but a considerable proportion of family income.Thi...

Ghana's cocoa production has declined in the past 25 years from half the world market share to about one tenth of the market. This has been partly due to policies that overvalued the domestic currency and heavily taxed cocoa exports. This study addresses the dilemma Ghana's government faces: how to provide enough producer incentives to stimulate the cocoa exports Ghana

One of the challenges for the Big Pharma is finding the golden line in the tradeoff between innovation and pricing. This paper investigates the relationship between R&D expenditures, patents and gross profits, based on US pharmaceutical industry panel data. The initial hypothesis states that there is a positive relationship between the R&D expenditures, patents applied in a current year and the company's profitability measured in terms of gross profits. The study concludes that there is a significant positive relationship between the R&D spending and the number of the applied patents in a current year. However, the relationship between the patents applied and the profitability has proved to be negative. The incline in the total assets and sales volume leads to the increasing profitability, whereas the size of the firm measured by the number of employees has an opposite negative effect. Results are relevant to the ongoing discussions regarding the fairness of pharmaceutical industry pricing, since it provides an evidence on the relationship between R&D expenditures, patents and gross profits.

This paper evaluates the contribution of cash transfer programmes to the observed fall in inequality in Brazil between 1995 and 2004 as well as its impact on poverty. We use the 2004 Brazilian National Household Survey (PNAD) that for the first time collected data on the incidence of some of the cash transfer programmes. We develop a methodology to separate

Using data from the 2013 Survey of Consumer Finances, this research examines competing and complementary cultural and structural explanations of the sources of racial differences in wealth. We use OLS regression and quantile regression to identify the major individual-level sources of wealth differences between African Americans and whites. Whites have more favorable wealth characteristics than do African Americans on all of the variables in the analysis: gender of household head, bankruptcies, spending patterns, stock ownership, business ownership, home ownership, inheritance, educational attainment, income, occupation, age, and number of children. Cultural factors, having a female-headed family, spending patterns, and inheritance account for little of the racial wealth gap. Racial differences in income, stock ownership, and business ownership account for much of the explained racial wealth gap. Moreover, compared with whites, African Americans receive significantly lower wealth returns to education, age, income, stock ownership, and business ownership. We discuss the implications of our findings.

In the past decade, the field of behavioral economics has given new insights to our understanding of poverty—and, as a result, forced us to re-examine the current set of anti-poverty policies and programs. By designing and deploying innovative interventions grounded in behavioral science, policymakers seek to ensure an early eradication of poverty and its associated economic ailments.
In this paper, we propose Basic Income - a flat, unconditional and universal monthly income to every citizen of a country as an alternate social welfare scheme. We begin the paper by analyzing some of the welfare policy themes currently in practice. We then propose an alternative in form of Basic Income. In Section 4, we use insights from behavioral economics to evaluate the proposed policy measure. We conclude by a discussion of the practicalities of this proposal in terms of cost, scale and feasibility.

Nos últimos anos, percebeu-se um grande volume de estudos direcionados para a distribuição de renda no Brasil. O fato de nosso país estar entre os primeiros do mundo no ranking da desigualdade na distribuição de renda e a grande disponibilidade de dados produzidos e divulgados pelo IBGE justificam o interesse pelo tema. Os estudos dessa natureza no Brasil se intensificaram a partir dos anos 70 e prevalece o consenso de que a maior parte de toda a renda produzida no país continua nas mãos de poucos. Tanto nos estudos atuais como nos da década de 1970, há uma certa discordância quanto aos determinantes da má distribuição de renda. Alguns estudos continuam apontando a educação como variável de grande poder explicativo
das diferenças entre os rendimentos, enquanto outros procuram
demonstrar que há uma superestimação da variável
educação como determinante principal da desigualdade entre
os rendimentos.
Este livro está dividido em quatro capítulos. O primeiro trata dos estudos sobre a distribuição de renda no Brasil desde os anos 70 até os dias atuais e tem como objetivo esclarecer os principais determinantes da distribuição de renda em nosso país. O segundo aborda a distribuição de renda nos municípios paulistas e apresenta algumas comparações entre a concentração de renda no estado de São Paulo, nos estados selecionados e no Brasil. O terceiro discute alguns
aspectos metodológicos do Índice de Desenvolvimento Humano
Municipal – IDH-M, bem como sua evolução no Brasil,
em estados selecionados e nos municípios do estado de
São Paulo. Realiza-se uma decomposição do índice em três
dimensões (longevidade, educação e renda) para realizar a
análise da evolução. O quarto procura relacionar distribuição
de renda com desenvolvimento humano nos municípios
do estado de São Paulo e também propõe um novo indicador
de desenvolvimento humano, o Índice de Desenvolvimento
Humano Municipal Amplo – IDHA-M, que, diferentemente
do IDH-M, inclui a concentração de renda.