An adverse social welfare consequence of a rich-to-poor income transfer: A relative deprivation approach

A transfer from a richer individual to a poorer one seems to be the most intuitive and straightforward way of reducing income inequality in a society. However, can such a transfer reduce the welfare of the society? We show that a rich-to-poor transfer can induce a response in the individuals’ behaviors which actually exacerbates, rather than reduces, income inequality as measured by the Gini index. We use this result as an input in assessing the social welfare consequence of the transfer. Measuring social welfare by Sen’s social welfare function, we show that the transfer reduces social welfare. These two results are possible even for individuals whose utility functions are relatively simple (namely, at most quadratic in all terms) and incorporate a distaste for low relative income. We first present the two results for a population of two individuals. We subsequently provide several generalizations. We show that our argument holds for a population of any size, and that the choice of utility functions which trigger this response is not singular - the results obtain for an open set of the space of admissible utility functions. In addition, we show that a rich-to-poor transfer can exacerbate inequality when we employ Lorenz-domination, and that it can decrease social welfare when we draw on any increasing, Schur-concave welfare function

The Australian Charter of Employment Rights: The missing dimensions

Just prior to the 2007 General Election, a group of labour lawyers and economists, broadly sympathetic to the Labor Party, produced a Charter of Employment Rights. This article examines the Charter's proposals and its underlying framework, and suggests significant aspects of work and labour have been omitted. It contends that the Charter would have been improved if it had not retained an artificially stretched definition of workers as employees, in which the only relationship worthy of inclusion in a Charter is that between the direct employer and employee. The framework and language of the Charter convey a paternalistic approach and an outdated focus on industrial labour, while ignoring aspects of the emerging global system of work linked to the concept of occupation

Does regulation trade-off quality against inequality? : The case of German architects and construction engineers

We exploit an exogenous price increase by about 10% for architectural services to answer the question how price regulation affects income inequality and service quality. Using individual-level data from the German microcensus for the years 2006 to 2012, we find a significant reform effect of 8% on personal net income for self-employed architects and construction engineers. This group moved from the second lowest to the highest quintile of the net income distribution. This increase in inequality is associated with a deterioration of service quality. The reform reduced average scores of a peer ranking for architects by 18%

Competitive selection, trade, and employment:The strategic use of subsidies

We thank Holger Görg, Philipp Schröder, Fredrik Sjöholm, participants at the Danish International Economics Workshop, seminar participants at Aberdeen, Sheffield and Loughborough, three anonymous referees and the Editor of the journal, for helpful comments and suggestions. Funding from the European Union’s Seventh Framework Programme for research, technological development and demonstration under grant agreement no 290647 is gratefully acknowledged.Peer reviewedPostprin

Worker heterogeneity, new monopsony, and training

A worker's output depends not only on his/her own ability but also on that of colleagues, who can facilitate the performance of tasks that each individual cannot accomplish on his/her own. We show that this common-sense observation generates monopsony power and is sufficient to explain why employers might expend resources on training employees even when the training is of use to other firms. We show that training will take place in better-than-average or ‘good’ firms enjoying greater monopsony power, whereas ‘bad’ firms will have low-ability workers unlikely to receive much training

3-Oxocyclo­butane­carboxylic acid: hydrogen bonding in a small-ring γ-keto acid

The title ketocarboxylic acid, C5H6O3, is the smallest carboxy­cyclanone to have its crystal structure determined. It adopts a chiral conformation, by rotation of its carboxyl O atoms away from the plane of skeletal symmetry that passes through the carboxyl carbon and both atoms of the ketone carbonyl. The four-membered ring is non-planar, with a shallow fold of 14.3 (1)° along a line connecting the two α-carbons of the ketone group. In the crystal, the molecules are linked by centrosymmetric hydrogen-bond pairing of ordered carboxylic acid groups [O⋯O = 2.6392 (12) Å and O—H⋯O = 175.74 (15)°], yielding two different sets of dimers, related by by a 21 screw axis in c, in the cell. A C—H⋯O interaction is also present

Price of anarchy on heterogeneous traffic-flow networks

The efficiency of routing traffic through a network, comprising nodes connected by links whose cost of traversal is either fixed or varies in proportion to volume of usage, can be measured by the `price of anarchy'. This is the ratio of the cost incurred by agents who act to minimise their individual expenditure to the optimal cost borne by the entire system. As the total traffic load and the network variability - parameterised by the proportion of variable-cost links in the network - changes, the behaviours that the system presents can be understood with the introduction of a network of simpler structure. This is constructed from classes of non-overlapping paths connecting source to destination nodes that are characterised by the number of variable-cost edges they contain. It is shown that localised peaks in the price of anarchy occur at critical traffic volumes at which it becomes beneficial to exploit ostensibly more expensive paths as the network becomes more congested. Simulation results verifying these findings are presented for the variation of the price of anarchy with the network's size, aspect-ratio, variability and traffic load

Financial Transaction Tax: Small is Beautiful

The case for taxing financial transactions merely to raise more revenues from the financial sector is not particularly strong. Better alternatives to tax the financial sector are likely to be available. However, a tax on financial transactions could be justified in order to limit socially undesirable transactions when more direct means of doing so are unavailable for political or practical reasons. Some financial transactions are indeed likely to do more harm than good, especially when they contribute to the systemic risk of the financial system. However, such a financial transaction tax should be very small, much smaller than the negative externalities in question, because it is a blunt instrument that also drives out socially useful transactions. There is a case for taxing over-the-counter derivative transactions at a somewhat higher rate than exchange-based derivative transactions. More targeted remedies to drive out socially undesirable transactions should be sought in parallel, which would allow, after their implementation, to reduce or even phase out financialtransaction taxes

Dealing with a traumatic past: the victim hearings of the South African truth and reconciliation commission and their reconciliation discourse

In the final years of the twentieth and the beginning of the twenty-first century, there has been a worldwide tendency to approach conflict resolution from a restorative rather than from a retributive perspective. The South African Truth and Reconciliation Commission (TRC), with its principle of 'amnesty for truth' was a turning point. Based on my discursive research of the TRC victim hearings, I would argue that it was on a discursive level in particular that the Truth Commission has exerted/is still exerting a long-lasting impact on South African society. In this article, three of these features will be highlighted and illustrated: firstly, the TRC provided a discursive forum for thousands of ordinary citizens. Secondly, by means of testimonies from apartheid victims and perpetrators, the TRC composed an officially recognised archive of the apartheid past. Thirdly, the reconciliation discourse created at the TRC victim hearings formed a template for talking about a traumatic past, and it opened up the debate on reconciliation. By discussing these three features and their social impact, it will become clear that the way in which the apartheid past was remembered at the victim hearings seemed to have been determined, not so much by political concerns, but mainly by social needs