5,545 research outputs found
Inequality and income gaps
This paper discusses inequality orderings based explicitly on closing up of income gaps, demonstrating the links between these and other orderings, the classes of functions preserving the orderings and applications showing their usefulness in comparison of economic policies
Estimation of household demand systems with theoretically compatible Engel curves and unit value specifications
We develop a method for estimation of price reactions using unit value
data which exploits the implicit links between quantity and unit value
choices. This allows us to combine appealing Engel curve specifications
with a model of unit value determination in a way which is consistent
with demand theory, unlike methods hitherto prominent in the literature.
The method is applied to Czech data
Demand properties in household Nash equilibrium
We study noncooperative household models with two agents and several voluntarily contributed public goods, deriving the counterpart to the Slutsky matrix and demonstrating the nature of the deviation of its properties from those of a true Slutsky matrix in the unitary model. We demonstrate the importance of distinguishing between cases in which there are and are not jointly contributed public goods and provide results characterising both cases. Demand properties are contrasted with those for collective models and conclusions drawn regarding the possibility of empirically testing the collective model against noncooperative alternatives
Noncooperative household demand
We study noncooperative household models with two agents and several voluntarily contributed public goods, deriving the counterpart to the Slutsky matrix and demonstrating the nature of the deviation of its properties from those of a true Slutsky matrix in the unitary model. We provide results characterising both cases in which there are and are not jointly contributed public goods. Demand properties are contrasted with those for collective models and conclusions drawn regarding the possibility of empirically testing the collective model against noncooperative alternatives and the noncooperative model against a general alternative. (C) 2010 Elsevier Inc. All rights reserved
Consumption inequality and partial insurance
This paper examines the transmission of income inequality into consumption inequality and in
so doing investigates the degree of insurance to income shocks. Panel data on income from the
PSID is combined with consumption data from repeated CEX cross-sections to identify the degree
of insurance to permanent and transitory shocks. In the process we also present new evidence of
the growth in the variance of permanent and transitory shocks in the US during the 1980s. We find
some partial insurance of permanent income shocks with more insurance possibilities for the college
educated and those nearing retirement. We find little evidence against full insurance for transitory
income shocks except among low income households. Tax and welfare benefits are found to play
an important role in insuring permanent shocks. Adding durable expenditures to the consumption
measure suggests that durable replacement is an important insurance mechanism, especially for
transitory income shocks
Decomposing changes in income risk using consumption data
This paper concerns the decomposition of income risk into permanent and transitory components using repeated cross-section data on income and consumption. Our focus is on the detection of changes in the magnitudes of variances of permanent and transitory risks. A new approximation to the optimal consumption growth rule is developed.
Evidence from a dynamic stochastic simulation is used to show that this approximation can provide a robust method for decomposing income risk in a nonstationary environment. We examine robustness to unobserved heterogeneity in consumption growth and to unobserved heterogeneity in income growth. We use this approach to investigate the growth in income inequality in the UK in the 1980s
The impact of immigration on the UK labour market
This paper provides an empirical investigation of the way immigration affects labour
market outcomes of native born workers in the UK, set beside a theoretical
discussion of the underlying economic mechanisms. We discuss the problems that
may arise in empirical estimations, and suggest ways to address these problems.
Our empirical analysis is based on data from the British Labour Force Survey. We
show that the overall skill distribution of Britain’s immigrant workforce is remarkably
similar to that of the native born workforce. We investigate the impact of
immigration on employment, participation, unemployment and wages of the resident
population. We find no evidence that immigration has overall effects on any of these
outcomes at the aggregate level. There is some evidence that effects are different
for different educational groups
Income risk and consumption inequality: a simulation study
This paper assesses the accuracy of decomposing income risk into permanent and transitory components using income and consumption data. We develop a specific approximation to the optimal consumption growth rule and use Monte Carlo evidence to show that this approximation can provide a robust method for decomposing income risk. The availability of asset data enables the use of a more accurate approximation allowing for partial self-insurance against permanent shocks. We show that the use of data on median asset holdings corrects much of the error in the simple approximation which assumes no self-insurance against permanent shocks
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