The Distributional Impact of Statewide Property Tax Relief: the Michigan Case

This study uses data from a random survey of 2001 Michigan households to analyze the extent to which the Michigan ctreuit-breaker has been successful in reducing the income regressivity of the property tax and in changing relative property tax burdens. Because of its relatively extensive coverage, including renters as well as homeowners and the nonaged as well as the aged, the circuit-breaker has yielded a more equal distribution of income within Michigan. Its potential to change the distribution of income depends on the particular formula utilized, but redistributional effects have thus far been lamited because program participation has been positively correlated with income. To the extent that reductions in the price ofpublic services created by the circuit-breaker are perceived by households, the biggest stimulus appears to be in high property tax/high-income countiesPeer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/68848/2/10.1177_109114218301100201.pd

Minimum Wages and Poverty with Income-Sharing

Textbook analysis tells us that in a competitive labor market, the introduction of a minimum wage in terms of poverty rather than in terms of unemployment. This paper makes three contributions to the basic theory of the minimum wage. First, we analyze the effects of a higher minimum wage in terms of poverty rather than in terms of unemployment. Second, we extend the standard textbook model to allow for income-sharing between employed and unemployed persons in society. Third, we extend the basic model to deal with income sharing within families. We find that there are situations in which a higher minimum wage raises poverty, others where it reduces poverty, and yet others in which poverty is unchanged. We characterize precisely how the poverty effect depends on four parameters: the degree of poverty aversion, the elasticity of labor demand, the ratio of the minimum wage to the poverty line, and the extent of income-sharing. Thus, shifting the perspective from unemployment to poverty leads to a considerable enrichment of the theory of the minimum wage

Labor Inflow Induced Wage Inequality and Public Infrastructure

By making use of a simple general equilibrium model of a small open economy, the author examines the link between labor mobility and the size of wage inequality in the presence of productive public infrastructure. The paper shows that the provision of public infrastructure plays an important part in determining the size of labor inflow induced wage inequality. Specifically, it shows that, irrespective of the relative factor intensities, a small inflow of either skilled or unskilled labor does not affect the size of wage inequality if private industries derive equal benefits from public infrastructure provision. A small inflow of skilled (unskilled) labor increases (decreases) wage inequality if skilled (unskilled) labor intensive industry derives more benefits from public infrastructure. Copyright � 2008 The Author. Journal compilation � 2008 Blackwell Publishing Ltd.