John A. Bishop and Yoram Amiel
Research on Economic Inequality Volume 12 is the outgrowth of University of Alabama Poverty and Inequality Conference, May 22–25, 2003. The motivation for the conference was to…
Abstract
Research on Economic Inequality Volume 12 is the outgrowth of University of Alabama Poverty and Inequality Conference, May 22–25, 2003. The motivation for the conference was to honor John P. Formby upon his retirement. The conference, funded by the University, was designed to bring together three groups of people; first, some of the most recognized scholars in the field, second, current and former colleagues of John Formby’s working in this field, and third, Dr. Formby’s former Ph.D. and post-doctoral students. Seventeen papers were presented, 11 of which are authored or co-authored by Dr. Formby’s former students. Peter Lambert and Yoram Amiel also participated in the conference. Dan Slottje, John Creedy, Shlomo Yitzhaki and Quentin Wodon did not attend but contributed papers.
Kamol Chumrusphonlert, John P. Formby and John A. Bishop
Dominance techniques are used to analyze and rank inequality, welfare, and poverty across regions in Thailand in the 1990s. Inference-based dominance methods are applied to…
Abstract
Dominance techniques are used to analyze and rank inequality, welfare, and poverty across regions in Thailand in the 1990s. Inference-based dominance methods are applied to consumption expenditure microdata from the Household Socio-Economic Surveys (SES) of 1992, 1994, 1996, 1998 and 2000. Attention is focused on the period immediately before and after the economic contraction of 1996–1997. Lorenz dominance is employed to assess inequality, while first-order Engel food share dominance is applied to rank welfare across time and among regions. Poverty is evaluated by comparing truncated food-share quantile functions. The evidence reveals that the economic crisis in 1997 seems to affect inequality in Bangkok (the richest region) more than the Northeast (the poorest region), and most dramatic changes occur in the North and South. Welfare in Bangkok is unambiguously higher than in other regions before and after economic contraction. In fact, the great economic contraction changes the rankings of economic well-being and poverty only in the North, South, and Northeast.
John P. Formby, John A. Bishop and Hoseong Kim
The Internal Revenue Code of the U.S. as well as income tax statutes in a number of states contain provisions that penalize some married couples by virtue of their marital status…
Abstract
The Internal Revenue Code of the U.S. as well as income tax statutes in a number of states contain provisions that penalize some married couples by virtue of their marital status. These families have greater tax liabilities than would apply if the husband and wife divorced. At the same time, other married couples benefit from reduced taxes made possible by the income splitting provisions of the laws. Thus, some families receive tax benefits and others are penalized as a consequence of the choice to be married. There is now much discussion in Washington and state capitals of reducing and possibly eliminating the so-called “marriage tax”. Most proposals for reform retain the income splitting provision of the tax code; thereby avoiding direct harm to families currently receiving tax benefits from marriage. This is the approach adopted in this paper.
John P. Formby, John A. Bishop and Hoseong Kim
Labor markets for unskilled and low-wage workers in the United States stagnated in the last quarter of the 20th century. The collapse in the low-wage labor market has been well…
Abstract
Labor markets for unskilled and low-wage workers in the United States stagnated in the last quarter of the 20th century. The collapse in the low-wage labor market has been well documented1 and numerous research initiatives have investigated the causes. Despite some geographical mismatches between buyers and sellers low-paying jobs are generally available but forces are at work on both the demand and supply sides of unskilled labor markets that make it increasingly difficult for working families at or near the bottom of the income distribution to earn enough to meet basic needs. Welfare reform effectively increased the supply of unskilled workers, which placed added pressures on wages and earnings of low-income families.
New measures of the degree of overall income tax progression in the United States are provided for the period 1969 to 1995. Indices of progression from the distributional and tax…
Abstract
New measures of the degree of overall income tax progression in the United States are provided for the period 1969 to 1995. Indices of progression from the distributional and tax scale invariant classes of measures are considered. The sensitivity of measures of progression to the income concept used and to equivalence scale adjustments is explored. Recently developed statistical inference procedures are applied to reveal new insights into changes in progressivity across time. Using a microdata based measure of comprehensive income and applying statistical tests are shown to be of crucial importance in reaching conclusions about changes in income tax progression.
John A. Bishop, Jong-Rong Chiou and Jessica S.Y. Mai
In this paper we apply the Gini adjustment procedure developed by Bishop, Formby, and Smith (1997) to investigate the effects of demographic factors on earnings inequality in…
Abstract
In this paper we apply the Gini adjustment procedure developed by Bishop, Formby, and Smith (1997) to investigate the effects of demographic factors on earnings inequality in Taiwan. We advance their method using quantile regression to control for demographic factors between 1978 and 1999 based on the subsample of workers conducted by the DGBAS. It is found that the marginal impact effects of female on earnings inequality are larger than the effects of years of schooling and experience. Hence, gender gap has the most significant impact on earnings inequality in Taiwan. Finally, the policy implications from our study are that controlling for gender gap could reduce earnings inequality. In particular, adoption of an affirmative action policy for women may successfully reduce the overall level of earnings inequality in Taiwan.
This paper presents a “Granger Causality” analysis of the relationship between the antitrust enforcement activities of the Department of Justice and economic growth in the U.S…
Abstract
This paper presents a “Granger Causality” analysis of the relationship between the antitrust enforcement activities of the Department of Justice and economic growth in the U.S. economy from 1891 to 2002. Professor Posner posed the question 35 years ago about whether there was a relationship between the two economic variables. The empirical results show some economic impact from antitrust enforcement on economic growth and little feedback.
Christopher K. Johnson and Hoseong Kim
The impacts of median income and other variables on the Sen index of poverty in the United States are investigated using panel data with fixed time period and cross sectional…
Abstract
The impacts of median income and other variables on the Sen index of poverty in the United States are investigated using panel data with fixed time period and cross sectional effects. Estimates for the Sen index and its decomposed components – the headcount ratio, poverty gap ratio, and Gini coefficient among the poor reveal that median income among state/regions and across time systematically influences the Sen index and each of its components. However, the results reveal that labor market and demographic control variables have quite different effects on the distinct components of the Sen index.
Steven R. Beckman, John P. Formby, W.James Smith and Buhong Zheng
The leaky bucket and the transfer principle are tested under conditions of individual uncertainty, behind a veil of ignorance and when positions are known. We find that choices…
Abstract
The leaky bucket and the transfer principle are tested under conditions of individual uncertainty, behind a veil of ignorance and when positions are known. We find that choices under individual uncertainty are slightly more risk seeking than behind a veil of ignorance indicating that the conventional practice of modeling inequality aversion as risk aversion does not lead to serious error. However, our subjects can not be said to be risk seeking or risk averse but rather protect against downside risks and seek upside gain. As in previous experiments, we find that choices with positions known are quite insensitive to inefficiency and exhibit considerable antipathy to returns that accrue to others, whether richer or poorer. Richer American males are least likely to support leaky-bucket transfers that reduce inequality once positions are known. Lottery players, but not smokers show greater risk preference given individual uncertainty.