population increase economic growth educational inequality and income distribution some recent evidence abstract using a recent inter country sample impacts of population increase short run growth rate and educational level and inequality on income distribution are assessed as in almost all other studies high population increase is observed to be a disequalizer however unlike the position indicated in several earlier studies rapid short run economic growth seems to reduce income inequality while higher mean schooling level appears to be a mild equalizer contrary to the results reported by earlier researchers no adverse effect of educational inequality on income distribution is found

in search of smoking guns what makes income inequality vary over time in different countries we investigate the forces affecting the distribution of income by analyzing an unbalanced panel of information for 16 industrialized countries for the years 1966 through 1994 income inequality is measured with the gini coefficient of equivalent disposable income individuals are the unit of analysis the statistical analysis uses panel methods the results suggest that many factors affect the development of income inequality some factors are strictly economic a decreased industrial sector generally fosters inequality and some support is found for the view that increased trade of manufactured goods from developing countries is also a factor other forces are outside a strictly defined market sphere low inequality is found when a large proportion of the labor force belongs to a trade union and also when there is a large public sector in addition demographic circumstances are important since the proportion of the population under age 15 has a positive effect on inequality we find however no association between the unemployment rate and inequality

why voluntary export restraints are voluntary the paper presents an analysis of the effect upon an oligopolistic equilibrium of introducing a voluntary export restraint ver upon an importing firm a ver set at the free trade level of imports is shown to raise the profits of all firms within the industry the result follows as the imposition of a ver upon a free trade nash price competition forces the domestic firm to become an industry price leader the ver raises industry prices by facilitating collusion and lowers consumer welfare pourquoi les restrictions volontaires d 1 exportation sont volontaires ce memoire presente une analyse des effets de l introduction de restrictions volontaires a l exportation rve sur une entreprise qui importe dans un monde en equilibre oligopolistique on montre que l introduction de rve approximant le niveau des importations en regime de libre echange devrait augmenter les profits de toutes les entreprises dans l industrie cela decoule du fait que l imposition de rve sur un univers de concurrence par les prix a la nash en regime de libre echange force l entreprise domestique a devenir le leader en prix l introduction de rve augmente le niveau des prix de l industrie en facilitant la collusion et de ce fait reduit le niveau de bien etre des consomrnateurs

inequality in the globalizing asia this article investigates the impact of globalization on the inequality of asia it is the first attempt to examine 11 asian countries panel data allowing nonlinearity between globalization and inequality from 1960 to 2003 with robustness check we also survey the literature on growth globalization and inequality and reflect their endogenous relationships to our article we found the significant turning point of globalization at which inequality starts decreasing as further globalization proceeds it will offer us policy implications for the ongoing process of globalization in the asian economies

income inequality and health lessons from a refugee residential assignment program this paper examines the effect of income inequality on health for a group of particularly disadvantaged individuals refugees our analysis draws on longitudinal hospitalization records coupled with a settlement policy where swedish authorities assigned newly arrived refugees to their first area of residence the policy was implemented in a way that provides a source of plausibly random variation in initial location the results reveal no statistically significant effect of income inequality on the risk of being hospitalized this finding holds also for most population subgroups and when separating between different types of diagnoses our estimates are precise enough to rule out large effects of income inequality on health

development and inequality revisited three decades after the seminal article of kuznets 1955 and one decade after the empirical investigation of ahluwalia 1976b the relationship between income inequality and economic developement is still controversial this paper examines the above relationship within a time series cross section framework in a sample of countries which are representative of the non centrally planned economies of the world we use gdp per capita in real un international comparison project dollors as an indicator of a country s level of economic development the results lend support to the kuznets inverse u hypothesis although other factors relfecting the institutional setting of a country are found to affect income inequality significantly during the development process as well similar results are obtained if we exclude developed countries from the sample

the causal effect of income on health evidence from german reunification we investigate whether there was a causal effect of income changes on the health satisfaction of east and west germans in the years following reunification our data source is the german socio economic panel gsoep between 1984 and 2002 and we fit a recently proposed fixed effects ordinal estimator to our health measures and use a causal decomposition technique to account for panel attrition we find evidence of a significant positive effect of income changes on health satisfaction but the quantitative size of this effect is small this is the case with respect to current income and a measure of permanent income

modelling health income and income inequality the impact of income inequality on health and health inequality a framework is developed to analyse the impact of the distribution of income on individual health and health inequality with individual health modelled as a function of income and the distribution of income it is demonstrated that the impact of income inequality can generate non concave health production functions resulting in a non concave health production possibility frontier in this context the impact of different health policies are considered and it is argued that if the distribution of income affects individual health any policy aimed at equalising health which does not account for income inequality will lead to unequal distributions of health this is an important development given current uk government attention to reducing health inequality

finance and income inequality in kazakhstan evidence since transition with policy suggestions abstractkazakhstan gained independence in 1990 and has undergone significant changes in economic social and trade conditions since then we analyse the effects of financial development on income inequality in kazakhstan incorporating economic growth foreign investment education and the role of democracy as the drivers we establish that income inequality in kazakhstan is impaired by financial development in summary we send three messages for policy purposes first strengthening financial sector is necessary to close the gap between haves and have nots second attracting fdi beyond the hydrocarbon sector is necessary to alleviate inequality finally adaptation of education system to the new social and economic environment would help in improving income distribution

income related inequalities in mental health in great britain analysing the causes of health inequality over time using regression techniques this paper estimates the level of income related health inequality in gb in 1992 and 1998 inequality is decomposed to investigate which socio demographic factors are important contributors to health differences the paper includes a range of measured and subjective income variables to control for absolute income a relative deprivation measure is included to test the impact of income inequality on health inequality it is found that subjective financial status is a major determinant of ill health and makes a major contribution to income related inequalities in health relative deprivation is an important contributor for women but not for men

the impact of primary schooling on economic development a review of the evidence abstract the contribution of primary schooling to economic development is greater than has conventionally been percieved this review of recent research shows that primary schooling increases labour productivity in both urban and rural sectors and that the economic returns to such investment are typically high in addition it reduces fertility improves health and nutrition and promotes other behavioural and attitudinal changes which are helpful to economic development investment strategies which give primary schooling an important place would be more conducive of growth with equity than many alternatives priorities for government and donor policies are indicated as are those for future research

collective labor rights and income inequality this article examines the relationship between income inequality and collective labor rights conceptualized as workers legal and practical ability to engage in collective activity although worker organization is central to explaining income inequality in industrialized democracies worldwide comparative studies have neglected the role of class based actors i argue that the repression of labor rights reduces the capacity of worker organizations to effectively challenge income inequality through market and political processes in capitalist societies labor rights however are unlikely to have uniform effects across regions this study uses unbalanced panel data for 100 developed and less developed countries from 1985 through 2002 random and fixed effects models find that strong labor rights are tightly linked to lower inequality across a large range of countries including in the global south interactions between regions and labor rights suggest that the broader context in which class based actors a

equity and equality in health and health care this paper explores four definitions of equity in health care equality of utilization distribution according to need equality of access and equality of health we argue that the definitions of need in the literature are inadequate and propose a new definition we also argue that irrespective of how need and access are defined the four definitions of equity are in general mutually incompatible in contrast to previous authors we suggest that equality of health should be the dominant principle and that equity in health care should therefore entail distributing care in such a way as to get as close as is feasible to an equal distribution of health

do education and income really explain inequalities in health applying a twin design we apply a twin design to examine the relationship between health and education andincome the estimated associations between health and education and income controlling forunobserved endowments

the shadow price of foreign exchange with minimum wages abstract this note derives the shadow price of foreign exchange in a small open economy with minimum wage unemployment under tariffs quotas and voluntary export restraints the analysis is conducted in a dual general equilibrium framework with many goods and factors

foreign direct investment and income inequality further evidence abstract this paper examines the relationship between foreign direct investment fdi and income inequality special attention has been paid to data comparability and model specification by comparing models with and without geographical dummies this study shows that the statistically significant correlation between fdi and income inequality widely obtained in earlier studies might capture more of the geographical difference in inequality than the deleterious influence of fdi and to the extent that fdi does give rise to more unequal income distribution in the host less developed countries ldcs only east southeast asia ldcs appear to have been harmed by the inflow of fdi during the 1970s it should be noted however that the second result refers only to the marginal impact not the total impact apart from fdi our empirical evidence suggests that the level of economic development the direct role of government and to a smaller degree the significance of the agriculture sector in an ldc are crucial determinants of income inequality

the distribution of health and income a theoretical framework a general framework is developed to analyse variations in the distribution of population health where individual health is modelled as a function of income conditional upon the level of another factor such as health related behaviour results are derived for the response of the level of average health in a population and the degree of health inequality to alternative health promotion policies and equiproportionate income growth qualitative results are shown to depend on characteristics of the individual health production functions and the frequency distribution of the other factor at each income level these results are independent of the distribution of income the discussion focuses on the implications of these results for contemporary research into inequalities in health and income

content protection urban unemployment and welfare a three sector general equilibrium model is developed to examine the resource allocation and welfare effects of domestic content protection an increase in domestic content requirements lowers the urban unemployment ratio the production of the domestic intermediate good the import of the foreign intermediate good and the national welfare

on the political economy of welfare expansion a comparative analysis of 18 advanced capitalist democracies 1960 1971 this article elaborates the thesis that economic growth and various types of collective action by class linked actors determine the expansion and decline of welfare spending in rich capitalist democracies our multivariate model of this thesis specified to 1960 1971 growth rates in direct cash transfer payments as proportions of gross domestic product is supported strongly by regression analyses these indicate that economic growth notably facilitates transfer payment growth they also suggest that rightist party participation in government notably dampens welfare expansion while leftist centrist and christian democratic party participation in government are conducive to welfare expansion and they suggest that the political influences of both unions and large industrial corporations are conducive to growth in transfers payments as well in addition state authorities appear to augment welfare spending in response to working class protests strike activity and capital investment disinvestment activ

increasing returns urban unemployment and international capital mobility a trade policy analysis abstract this paper compares the effects of tariffs quotas and ver both with and without international capital mobility for a small open economy facing urban unemployment of unskilled labor and external increasing returns in the manufacturing sector expressions for the shadow price of foreign exchange and capital are derived under each type of trade restriction it is shown that international capital mobility in such an economy unambiguously lowers the welfare cost of all forms of trade restriction in contrast to the existing literature on full employment crs economy where international capital mobility unambiguously raises the welfare cost of tariff protection

variable returns to scale urban unemployment and welfare the proposition that free trade is superior to no trade has a classical ancestry adam smith and ricardo were amongst the first proponents of free trade samuelson 26 proved and it is held by economists today that free trade is the optimal policy in the presence of standard paretoconditions it is also generally agreed amongst economists that lower trade intervention is superior to higher trade intervention given competitive conditions in a small country these propositions do not hold however in the presence of factor market imperfections such as wage differentials in a small country and therefore production or wage subsidies improves social welfare the two models which are generally used to investigate the positive as well as normative aspects of trade theory in the presence of unemployment are the uniform real minimum wage model which is based on the assumption of general rigidity of real wage in one or two sectors of production and the sector specific minimum wage model which focuses on the phenomenon of rural urban migration in the face of large scale urban unemployment these two models are commonly utilized by trade theorists to analyze trade and unemployment specifically studies by haberler 13 johnson 16 batra and seth 3 findlay 12 and brecher 6 7 investigate the consequences of rigid factor prices for a small country whereas the normative as well as positive aspects of sector specific unemployment have been explored by harris and todaro 15 bhagwati and srinivasan 4 5 and more recently by batra and naqvi 2 das 10 and kahn 19 it has been correctly observed that the introduction of an exogenously specified real minimum wage among other things generates unorthodox results concerning unemployment and gains from trade a large body of research has also been concerned with the welfare implications of different commercial policies in the context of variable returns to scale kemp and negishi 20 have pointed out the beneficial effects of trade in the presence of variable returns to scale production subsidy and consumption taxes eaton and panagariya 11 have analyzed the question of gains from trade in the presence of variable returns to scale and in the context of pareto welfare criterion whereas choi and yu 8 have examined the welfare implications of tariffs and consumption taxes as well as the welfare rankings of these policies under variable returns to scale while panagariya and succar 25 have modified the necessary and sufficient conditions for stability under increasing returns to scale in urban sector

income inequality regime repressiveness and political violence death rate from political violence is postulated to vary cross nationally as a positively accelerated time lagged function of income inequality and as a nonmonotonic inverted u function of regime repressiveness the former hypothesis is consistent with approaches to the explanation of collective political violence that emphasize the general concept of discontent or more specifically relative deprivation the latter hypothesis is consistent with a political process version of the resource mobilization approach in the context of a multivariate model estimated across two decades 1958 67 and 1968 77 support is found for the inequality hypothesis support also is foundfor the regime repressiveness hypothesis in the decade 1968 77 for which the index of regime repressiveness is available the u curve effect of regime repressiveness appears to have stronger impact on variation in rates of deadly political violence than the positively accelerated effect of income inequality

urban unemployment terms of trade and welfare it is generally accepted prior to 1970 that a deterioration in the terms of trade results in lower social welfare in particular prebisch 11 and singer 12 have expressed the basic concern with the terms of trade the secular deterioration in the terms of trade facing less developed countries ldcs leads to income and welfare losses batra and pattanaik 2 nevertheless shows that a deterioration in the terms of trade in the presence of an intersectoral wage differential may raise welfare bhagwati and brecher 5 demonstrate that a decline in the terms of trade can improve real income if capital is mobile internationally recently anam 1 obtains a similarly interesting result for an economy engaging in quota induced rent seeking activities it is notable that none of these studies considers a key feature inherent in a typical ldc namely the existence of substantial urban unemployment thus the purpose of this paper is to examine the welfare impacts of terms of trade losses for ldcs plagued by pervasive urban unemployment the well known harris todaro 7 framework of sector specific unemployment is utilized in addition we derive and contrast various welfare effects of a change in the terms of trade when a ldc pursues alternative import substitution policies i e tariffs vs quotas over the short vs the long run the paper is organized as follows section ii develops the model and provides the transformation relation between urban and rural outputs section iii examines the welfare effects of an exogenous shift in the terms of trade for a tariff or quota distorted economy in the short run as well as in the long run finally concluding remarks are set out in section iv

an alternative source of measurement error as an explanation for the inverted u hypothesis in the rapidly growing literature on the relationship between income distribution and economic development two of the most frequently investigated issues are the so called inverted u hypothesis otherwise known as the kuznets curve and short run trends in income distribution the inverted u hypothesis alleges that the relationship between income inequality and per capita income resembles an inverted u wherein at low levels of development there is little inequality but as income per capita rises inequality rises also but only up to a point after which it gradually decreases irrespective of the u shape of the relationship there is also very considerable interest in the direction size and explanation for trends in income distribution in developing countries

economic determinants of democracy the relationship between the level of economic development and the level of democracy found in most quantitative cross national research implies that the largest gains in democracy are experienced by countries at intermediate levels of development during the 1960s and 1970s however middle income countries were more likely to register declines in democracy than increases i explain this anomaly with the hypothesis that income inequality affects democracy and this effect often counteracts the positive influence of economic development because intermediate levels of economic development are associated with the highest levels of income inequality the independent negative effect of income inequality on change in level of democracy explains the declines in democracy in middle income countries cross national data from a sample of 58 countries support the hypothesis of a negative effect of income inequality on change in level of democracy from 1965 to 1980 this effect is robust when noneconomic determinants of democracy are taken into account and when sample size is increased

politics and inequality in latin america and the caribbean this article presents the first pooled time series analysis of the impact that politics and policy have on inequality in latin america and the caribbean the authors build on models consisting of sociological and economic variables adding the strength of the democratic tradition long term legislative partisan political power distribution and social spending to explain variation in inequality they analyze an unbalanced pooled time series data set for income distribution in 18 latin american and caribbean countries from 1970 to 2000 they show that the political variables add explanatory power a strong record of democracy and a left leaning legislative partisan balance are associated with lower levels of inequality as are social security and welfare spending under democratic regimes thus they replicate some and modify other well established findings from studies of organization for economic cooperation and development oecd countries in the very different context of latin america and the caribbean

economic inequality and its socioeconomic impact abstract income inequality is of fundamental interest not only to economists but also to other social scientists a substantial literature in economics and the social sciences has investigated the relationship between income inequality and economic growth and a variety of social phenomena the links between inequality and economic growth are explored as well as those between inequality and such key social variables as political conflict education health and crime the analysis in this paper follows a two step process first a review of the empirical evidence relating inequality to growth and to each of the above social variables is undertaken second the various causal mechanisms that have been proposed in the social science literature to explain those links are surveyed

urban unemployment and the gains from trade a welfare ranking of alternative commercial policies is constructed for the mobile capital harris todaro economy it is sh own that despite the presence of unemployment most noninterventioni st policies suggested by the competitive model of gains from trade ca rry over to the mobile capital harris todaro economy yet in contradi ction to the competitive model it is shown that all forms of trade i ntervention are not detrimental to welfare only those that reduce th e volume of trade are the export promotion policies so copiously fol lowed by developing countries are vindicated but their import substi tution policies are shown to be without justification copyright 1987 by the review of economic studies limited

promise and pitfalls in the use of secondary data sets income inequality in oecd countries as a case study this paper examines the role of secondary data sets in empirical economic research taking the field of income distribution as a case study we illustrate problems faced by users of secondary statistics showing how both cross country comparisons and time series analysis can depend sensitively on the choice of data after describing the genealogy of secondary data sets on income inequality we consider the main methodological issues and discuss their implications for comparisons of income inequality across oecd countries and over time the lessons to be drawn for the construction and use of secondary data sets are summarized at the end of the paper

economic openness democracy and income inequality an empirical analysis scholars have studied effects of economic openness and democracy on national income inequality in two literatures in democracy studies scholars agree democracy reduces inequality but empirical evidence is ambiguous in globalization studies effects of economic openness on inequality are debated but have not been rigorously examined this article is the first systematic statistical study of the effects of both economic openness and democracy on income inequality these effects need to be studied together the authors measure national income inequality from a comprehensive gini coefficient data set economic openness is measured from trade flows foreign direct investment inflows and financial capital inflows the period studied is 1960 to 1996 the unit of analysis is a country decade and the sample includes 69 countries the authors find that democracy and trade reduce income inequality foreign direct investments increase income inequality and financial capital does not affect income inequality policy implications are discussed

health income and relative deprivation evidence from the bhps it is believed that income affects health directly but it is argued that indirect income effects due to relative deprivation may be equally important this paper investigates these relationships using parametric and semiparametric panel data models which ameliorate problems of misspecification and unobservable heterogeneity by allowing for a flexible functional form of income we ensure that coefficients on relative deprivation variables are not an artefact of a highly non linear relationship between health and income the results provide strong evidence for the impact of income on self reported measures of health for men and women these results are robust across a range of techniques and are resilient to the inclusion of measures of relative deprivation the parametric results for relative deprivation largely reject its influence on health although there is some evidence of an effect in the semiparametric models

the effect of income growth and inequality on health inequality theory and empirical evidence from the european panel governments of eu countries have declared that they would like to couple income growth with reductions in social inequalities in income and health we show that theoretically both aims can be reconciled only under very specific conditions concerning the type of growth and the income responsiveness of health we investigate whether these conditions were met in europe in the 1990s using panel data from the european community household panel we demonstrate that i in most countries the income elasticity of health was positive and increases with income and ii that income growth was not pro rich in most eu countries resulting in small or negligible reductions in income inequality the combination of both findings explains the modest increases we observe in income related health inequality in the majority of countries

development and distribution a critique of the cross country u hypothesis abstract this paper questions the validity of a modern paradigm viz the u hypothesis it argues that notwithstanding contrary claims the recent cross country econometric studies by ahluwalia and others have little in common from a methodological point of view with kuznets earlier intertemporal national studies ahluwalia s cross country u curve is found to be based on defective statistics and questionable methodological premises in specific the estimation of one u curve from observations on both ldcs and dcs is criticised a sample restricted to the ldc group considerably weakens support for the u hypothesis further even marginal variations in the data set lead to the virtual disappearance of ahluwalia s empirical relationship the paper concludes that the cross country u hypothesis is more of a hindrance than an aid to our comprehension of the relationship between economic growth and income distribution

income inequality development and dependence a reconsideration we reconsider the role of foreign investment in income inequality in light of recent critiques that question the results of quantitative cross national research on foreign capital penetration we analyze an unbalanced cross national data set in which countries contribute different numbers of observations with a maximum of 88 countries and 488 observations dated from 1967 to 1994 random effects regression models that control for unmeasured country heterogeneity are used to investigate effects of foreign capital penetration on inequality measured as the gini coefficient against the background of an internal developmental model of inequality we adapt firebaugh s 1992 1996 critique of the literature on the effect of foreign investment on economic growth to the study of income inequality and find that the stock of foreign direct investment has an effect on inequality that is independent of the mechanisms identified by firebaugh we explore tsai s 1995 claim that the effect of foreign capital penetration is spurious and find that foreign stock has a significant positive effect on inequality net of region specific differences an alternative interpretation of the findings of the foreign investment inequality literature is discussed in light of the discovery of an inverted u shaped relationship between income inequality and foreign investment stock per capita we conclude that thinking on the relationship between income inequality and investment dependence should be revised in light of an investment development path relating the inflow and outflow of foreign capital to economic development

the effect on income distribution of development the growth rate and economic strategy abstract an analysis of cross section and time series data for 83 countries confirms some and contradicts other work on income distribution new findings include a dualistic socio political system is highly unfavorable for equality neither the extent of government intervention in the economy nor the rate of manufactured exports are systematically related to income distribution the analysis confirms that there is no systematic relationship between equality and the rate of economic growth educational participation and a reduction in the share of primary exports in gdp are both favorable for equality there is some support for the kuznets hypothesis that inequality increases as per capita income rises to about 400 and then declines with further income increase but the empirical support is not strong and may be weakening over time these findings lead to more optimistic conclusions then other work that rapid growth in a mixed economy is quite consistent with unchanged or even improved income distribution even at early stages of development

does liberte egalite a survey of the empirical links between democracy and inequality with some evidence on the transition economies the effect of the distribution of political rights on income inequality has been studied both theoretically and empirically the authors review the existing literature and in particular the available empirical evidence the literature suggests that formal exclusion from the political process through restrictions on the voting franchise appears to have caused a high degree of economic inequality and democratization in the form of franchise expansion has typically led to an expansion in redistribution at least in the small sample of episodes studied in a less pronounced way albeit more emphatically compared with the ambiguous results of earlier research recent evidence indicates an inverse relationship between other measures of democracy based on civil liberties and political rights and inequality the transition experience of eastern european countries however seems to some extent go against these conclusions this opens possible new vistas for research namely the need to incorporate the length of democratic experience and the role played by ideology and social values

social opportunity costs and immiserizing growth some observations on the long run versus the short social opportunity costs of labor and capital are of importance to planners and loan officers alike and negative social opportunity costs have been studied by theorists in the guise of immiserizing growth see for example bhagwati srinivasan and wan 1978 in this note we present a unified treatment of such costs in the context of distortions of the harris todaro variety to which increasing emphasis is being given in both trade and development theory we pay particular attention to the distinction between the long run and the short i e to situations when capital is intersectorally mobile and when it is not our results clash with our intuition developed on the basis of both a the differential wage setting of which the mobile capital version of our model is an obvious generalization b the harristodaro model with an exogenously given rigid wage in the urban sector and immobile capital for example we show that immiserizing growth is impossible with intersectorally mobile capital but possible when capital is nonshiftable section ii presents the model and section iii investigates the question of the effect of population growth and capital accumulation on the size of the unemployment pool the results of section iii of interest in themselves are then used to discuss social opportunity costs and the possibility of immiserizing growth section v ends the paper with two concluding remarks

diffusion development and democracy 1800 1999 while a trend of growth in democratization over the past two centuries has been generally observed it is the remarkable growth in the democratization of the world over the past 30 years that has truly captured the imagination of social scientists policymakers and the general public alike two major sets of factors have dominated studies attempting to predict democratization one set characterizes endogenous or internal features of countries and may be referred to as socioeconomic development the other set less often tested characterizes exogenous variables that influence democratization via forces at work globally and within the region in which a country resides this set may be referred to as diffusion processes this study provides the first systematic comparison of these two sets of variables when assessed alone development indicators are robust predictors of democracy but their predictive power fades with the inclusion of diffusion variables in particular diffusion predictors of spatial pr

the trade off between gnp and unemployment in a dual economy many developing nations frequently are reluctant to liberalize their domestic markets and or their trade regimes the effect on the distribution of income is a common rationale for avoiding the politically dangerous step of liberalization the costs to the policymaker of getting the prices right are usually associated with a depreciated capital stock specific human and physical capital and transitional unemployment the notion that urban unemployment may rise in the face of policies that one would normally judge helpful is well understood in the dual economy literature corden 6 uses the harristodaro 11 two sector dual economy model to show how an urban wage subsidy may perversely raise urban unemployment khan and chaudhuri 12 generalize this result to n rural sectors ethnic groups finally gang and gangopadhyay 10 show that under certain sets of realistic assumptions choosing a more labor intensive technique of production may aggravate urban unemployment a separate strand of the dual economy literature explores the issue of optimal policies in a dual economy harris and todaro 11 argue that a manufacturing sector wage subsidy combined with restrictions on labor migration are needed to achieve the first best competitive equilibrium in a dual economy characterized by an urban minimum wage bhagwati and srinivasan 4 elegantly demonstrate that a uniform wage subsidy would do the same job bhagwati 3 has also shown that reductions of an only distortion the urban minimum wage here are successively welfare increasing until the distortion is fully eliminated and for the harris todaro model basu 2 shows that the value of aggregate output gnp is a monotonically increasing function of the uniform wage subsidy secondary distortions related to financing the subsidy remain the primary argument against full implementation of the first best optimal wage subsidy 6 152 in this paper i use the harris todaro dual economy model to demonstrate two connected propositions although a large enough application of any first best policy a uniform wage subsidy or devaluation are but two examples must decrease urban unemployment a small one may raise unemployment 2 thus uncertainty about the appropriate sized policy can lead to

inequality and development across and within countries summary this paper provides a cross country comparison of how income inequality has evolved within countries at different levels of development it uses overlapping nonparametric regression which allows visual comparisons of inequality both within and across countries as a result the methodology allows more specific conclusions than cross country regressions and yet is more general than within country case studies the approach highlights the problematic conclusions that can arise with parametric regressions in particular with tests of the kuznets curve while some previous results are confirmed some new results on inequality across countries are also discovered

testing the determinants of income distribution in major league baseball i introduction income of professional athletes is a frequent topic of discussion of fans sportscasters and the general public economists have also increasingly been attracted to this topic because the distribution of income of these players has both policy and business implications as a consequence the report of major league baseball s mlb blue ribbon panel formed in 1998 by mlb commissioner bud selig received quite a lot of attention this panel was charged with describing and explaining the economic condition of mlb comprised of such dignitaries as former federal reserve chairman paul volker senator george mitchell yale university president richard levin and columnist george will this panel reported that team payrolls have become increasingly disparate the gap between rich and poor teams is not only wide but is growing levin et al 2000 a case in point is the fact that the salary of the highest paid player in the 2000 season los angeles kevin brown at 15 7 million was 95 of the entire payroll of the poorest team the minnesota twins the effect according to the panel s report is a dramatic decline in parity and competitiveness of mlb since 1994 a team in the top payroll quartile has won every world series game in 1999 the teams with the five largest payrolls had an average winning percentage of 0 557 whereas the five poorest teams had a comparable figure of 0 444 the report discusses various recommendations that may narrow this gap leading to what one might call convergence in team payrolls this article examines the distribution of income in mlb for 1985 to 2000 we revive and extend a technique first suggested by thurow 1970 and show how it can be used to test for time trends versus cross sectional demographic and economic aspects influencing income distribution thurow 1970 discusses the impact of various measures on median income in the present case by calculating the gini coefficient we can discuss the impact that the explanatory variables have on income inequality in the context of mlb we attempt to shed light on the reasons why teams have greater or lesser payroll disparity we leave the question of the effect of between team payroll inequality on team wins and team revenues for future research the issue of whether to use an inequality measure that is based on a particular distribution or one that is distribution free has been widely discussed in the income distribution literature silber 1999 ryu and slottje 1999 in advocating the use of parametric distributions point to several benefits of estimating the lorenz curve in this manner these benefits include the ability to summarize thousands of observation points with a few parameters the ability to estimate the density function at any point an enhanced ability to construct inequality measures and the ability to formulate possible laws that would otherwise not be possible to detect however there are problems associated with the use of a parametric lorenz curve such as the choice of a suitable distribution the problem is compounded by the fact that income data are often grouped and have an open ended highest income category making it difficult to obtain accurate estimates one advantage of using professional sports data is the fact that the salary is available per individual and is not grouped consequently an actual number is available for the highest income this study analyzes payroll inequality in a professional sport by team that is for each year we calculate a measure of inequality for each mlb team and consider the characteristic differences in within team payroll distributions our study is not however the first to consider income inequality within professional team sports depken 2000 and jewell and molina 2004 find that mlb teams with greater wage disparity have fewer wins furthermore sommers 1998 finds a negative relationship between team success and within team payroll inequality using national hockey league data

refitting the kuznets curve using a gender specific threshold model abstractprevious studies have reached mixed conclusions regarding the relationship between inequality and per capita income these studies however fail to consider gender differences in income inequality and how these may impact on the relationship between income inequality and per capita income using australian taxation statistics we derive three sets of gini coefficients i e female male and total for the period 1950 2013 we then examine the relationship between inequality and real per capita income and find that a gender specific threshold panel regression outperforms three other conventional models our findings suggest that one set of coefficients does not fit all in that the use of aggregate and constant coefficients may mask variations within and between gender inequality over time

inequality and political violence revisited in their 1987 article in this review muller and seligson used logged ordinary least squares lols to estimate the effect of income inequality on cross national levels of deaths by political violence t y wang challenges the robustness of the main conclusion and argues for the application of a maximum likelihood approach the exponential poisson regression epr model rather than lols he concludes that the widely used lols approach yields misleading conclusions when applied to event count data dixon muller and seligson replicate previous work using both lols and epr approaches and conclude that in most but not all respects the two approaches yield similar results supporting the effect of inequality when the specifications are identical they also argue in response to concerns expressed by brockett 1992 that the inequality results are robust when account is taken systematically of the best information on underreporting of deaths

trade reform with quotas partial rent retention and tariffs quotas are the predominant means of protection in developed countries with quota rents commonly shared between exporter and importer this paper derives shadow prices appropriate to evaluating trade reform under these circumstances and provides a number of useful sufficient conditions for welfare improving piecemeal reform in doing so the authors apply the distorted quantity constrained expenditure function and use implicit separability to derive more powerful results than have previously been available

tariffs quotas and voluntary export restraints with and without internationally mobile capital this paper presents a general framework for comparing the effects of tariffs quotas and vers voluntary export restraints both with and without international capital mobility expressions for the shadow price of foreign exchange and the shadow price of capital under each type of trade restriction are derived and it is shown that although international capital mobility raises the welfare cost of tariff protection it lowers the welfare cost of quantitative restrictions in most cases the effects of exogenous shocks in the presence of quotas are intermediate between those in the presence of tariffs and those in the presence of vers tarifs douaniers contingentements et restrictions volontaires d l exportation quand le capital est ou n est pas mobile internationalement l auteur presente un cadre general d analyse qu il utilise pour comparer les effets de tarifs douaniers de contingentements et de restrictions volontaires a l exportation dans des contextes ofu le capital est ou n est pas mobile internationalement l auteur derive le prix fictif du change etranger et le prix fictif du capital sous l un et l autre types de restrictions au commerce et montre que meme si la mobilite internationale du capital augmente le cofut en terme de bien etre de la protection tarifaire elle reduit le cofut en terme de bien etre des restrictions sur les quantites echangees dans tous les cas les effets de chocs exogenes quand des contingentements existent sont toujours dans la fourchette entre ceux qu on observe quand des tarifs douaniers existent et ceux qui prevalent quand des restrictions volontaires i l exportation existent

external increasing returns and the shadow price of foreign exchange abstract this paper shows that under external increasing returns to scale and a strictly concave production possibilities frontier the shadow price of foreign exchange in the presence of a tariff is the same as that in an economy with purely constant returns to scale however with a quota or a voluntary export restraint this shadow price is in general quite different from that in a purely constant returns to scale economy

income distribution and sociopolitical instability as determinants of savings a cross sectional model the purpose of this cross national study is twofold first it introduces income distribution and sociopolitical instability as arguments in the savings function second it presents some empirical evidence in relation to their quantitative effects on savings it is shown that sociopolitical instability has profound effects on the savings ratio it is also shown that the bulk of savings is produced by the middle income class as a result a redistribution of income at the expense of the upper income class yields a constant or an increased savings ratio developing on whether such a redistribution includes the lower income class or not

income inequality democracy and public sector size this study synthesizes and tests explanations of how public sector size and democracy affect income inequality the results based on unbalanced panel data for 64 developing and developed countries

on the harris todaro model with intersectoral capital mobility n b professor neary was based at trinity college dublin when this article was first published the full text of the article is not available in ora at this time citation neary j p 1981 on the harris todaro model with intersectoral capital mobility economica 48 191 219 234

income distribution and development some stylized facts in recent years the relationship between income distribution and the process of development has come under increasing scrutiny much of the debate has focused on the hypothesis originally advanced by simon kuznets that the secular behavior of inequality follows an inverted u shaped pattern with inequality first increasing and then decreasing with development this hypothesis has become so much a part of the conventional wisdom on this subject that it has generated considerable skepticism about the welfare implications of the development process indeed on some interpretations developing countries face the grim prospect not just of increasing relative inequality but also of declining absolute incomes for the lower income groups

tariffs quotas and domestic content protection some political economy considerations in this paper we have focused our attention on the relation between the configuration of protection seeking and of rent seeking interests and the choice of the protection instruments in doing so we have abstracted from the problem of nonequivalence of tariffs and quotas recent writings on product differentiation rodriguez 1979 donnenfeld 1984 have thrown new light on this old issue it may well be that the discussion is of key importance to the understanding of industry s predilection for quantitative restraints we also failed to deal with the question on nonequivalence of restrictive measures under conditions of uncertainty finally we touched only peripherally on the interaction among state it is perhaps more realistic to regard trade barrier formation as a game among nations as in baldwin and clarke 1985 every player seeks at once to protect its import substituting industries and to promote its exports by putting up barriers and by demanding that others lower theirs this approach is more suited however to explain the severity of restraints than it is to explain the nature of restraints which is the problem at hand trade restrictions have a protective and a revenue effect in less developed countries with ineffectual internal revenue collecting systems revenue seeking governments may ally themselves with protection seeking emergent industries and institute high tariffs tariffs and quotas may coexist if the trade restriction seeking alliance includes traders voluntary export restraints the newest of the protective devices may be popular because they circumvent international treaties and short circuit cumbersome procedures associated with changes in tariffs or quotas but they also have the virtue of inviting foreign exporters to act like price setters the harm to the foreign exporters is thereby mitigated in fact exporters may be gainers hence the danger of retaliatory action on the part of foreign governments is lessened domestic content legislation is a unique device in that the same domestic factor benefits from protection and also collects the protection created revenue we show the formal identity between the south african situation in which the maximum black white worker ratio is a binding constraint and regulations requiring that a given percentage of the value of the product be domestically produced we also derive formally the maximum permissible foreign content ratio which is optimal from the point of view of the protected interests in our analysis we have said virtually nothing about the victims of protectionism a discussion of the impact of the various measures on those who bear the cost of protection would doubtless deepen our understanding of the problem we should thus consider the magnitude of the deadweight loss and of the income transfer and the concentration or dispersion of the losers last but not least we should consider the question of awareness thus the cost impact of a tariff is easier to perceive than that of a quota with the cost of a ver or of domestic import content rule the most difficult to calculate of all it may be that the principle of the hiding hand is as important to the new political economy as the benthamite principles were to the old

the kuznets curve and the great u turn income inequality in u s counties 1970 to 1990 the authors examine the determinants of inequality in the distribution of family income in approximately 3 100 counties of the united states in 1970 1980 and 1990 such a study provides a window on global trends in social inequality during the period which spans the tail end of the kuznets curve and the more recent upswing in income inequality results from random effects regression models that control for unmeasured heterogeneity among states reveal the continued importance of the kuznetsian pattern of declining inequality with economic development a positive effect of urbanization on inequality a declining positive impact of sector dualism an increasing positive effect of educational heterogeneity and a persistent effect of racial dualism several variables associated with the recent upswing in inequality have significant effects female labor force participation negative female headed households positive percent of the population over age 65 changes from positive to negative over the period manufacturing employment negative and unemployment ambiguous they also discuss methods of estimating the gini coefficient for income inequality at the county level and measures of sector farm nonfarm dualism racial black white dualism and educational heterogeneity

import quotas and vers a comparative analysis in a three country framework abstract because a ver is inherently discriminatory the traditional two country analysis comparing it to a quota is inadequate this paper adopts a general equilibrium three country approach to compare tariffs quotas and vers a quota equivalent ver is defined alternatively in terms of quantity or price the welfare of the importing country is higher under a quota and that of the non restricted exporter is higher under a ver the welfare comparison for the ver restricted country is ambiguous a result which is at variance with conventional wisdom

political rights and income inequality a cross national test among contemporary nations the relationship between income equality and national wealth exhibits an inverted u shape low among the richest and poorest nations and high for nations with intermediate wealth to examine the reasons for this relationship i hypothesize that both political democracy and educational enrollment are related in a similar way to income inequality two data sets are used in this analysis modified version of muller s set of 62 nations circa 1965 1975 and hoover s data set multiple regression reveals that measures of political democracy and the educational enrollment levels have an inverted u relationship with income inequality national wealth gnp had no consistent direct effect on income inequality a satisfactory specification of national levels of income inequality must include the polynomial functions of political democracy and education

the shadow price of foreign exchange in a dual economy abstract this paper examines the shadow price of foreign exchange for a dual economy with tariffs quotas or vers we show that the shadow exchange rate is greater than the official rate in the presence of tariffs whereas it is greater or smaller than the official rate in the presence of quotas depending upon whether capital is sector specific or perfectly mobile furthermore the shadow exchange rate is unambiguously smaller than the official rate for the ver case when capital is intersectorally mobile the rate however may be larger than the official rate when capital is sector specific the practical implications of the results for project appraisal are also discussed

determinants of relative poverty in advanced capitalist democracies using relative poverty measures based on micro level data from the luxembourg income study in conjunction with pooled time series data for 14 advanced capitalist democracies between 1970 and 1997 the authors analyze separately the rate of pretax transfer poverty and the reduction in poverty achieved by systems of taxes and transfers socioeconomic factors including de industrialization and unemployment largely explain pre tax transfer poverty rates of the working age population in these advanced capitalist democracies the extent of redistribution measured as poverty reduction via taxes and transfers is explained directly by welfare state generosity and constitutional structure number of veto points and the strength of the political left both in unions and in government

a panel data heterogeneous bayesian estimation of environmental kuznets curves for co2 emissions this article investigates the environmental kuznets curves ekc for co2 emissions in a panel of 109 countries during the period 1959 to 2001 the length of the series makes the application of a heterogeneous estimator suitable from an econometric point of view the results based on the hierarchical bayes estimator show that different ekc dynamics are associated with the different sub samples of countries considered on average more industrialized countries show evidence of ekc in quadratic specifications which nevertheless are probably evolving into an n shape based on their cubic specification nevertheless it is worth noting that the eu and not the umbrella group led by us has been driving currently observed ekc like shapes the latter is associated to monotonic income co2 dynamics the eu shows a clear ekc shape evidence for less developed countries consistently shows that co2 emissions rise positively with income though there are some signs of an ekc analyses of future performance neverthe