Bottom Income Quintile Research Articles

On Compulsory Voting and Income Inequality in a Cross-Section of Countries

This paper explores the link between compulsory voting and income distribution using a cross-section of countries around the world. Our empirical cross-country analysis for 91 countries during the period 1960-2000 shows that compulsory voting, when enforced strictly, improves income distribution, as measured by the Gini coefficient and the bottom income quintiles of the population. Our findings are robust to changes and additions to our benchmark specification. Since poorer countries suffer from relatively greater income inequality, it might make sense to promote such voting schemes in developing regions such as Latin America. This proposal assumes that bureaucratic costs related with design and implementation are not excessive.

Mortality Burden and Socioeconomic Status in India

BackgroundThe dimensions along which mortality is patterned in India remains unclear. We examined the specific contribution of social castes, household income, assets, and monthly per capita consumption to mortality differentials in India.Methods and FindingsCross-sectional data on 217 363 individuals from 41 554 households from the 2004–2005 India Human Development Survey was analyzed using multiple logistic regressions. Mortality differentials across social castes were attenuated after adjusting for household economic factors such as income and assets. Individuals living in the lowest income and assets quintiles had an increased risk of mortality with odds ratio (OR) of 1.66 (95% CI = 1.23–2.24) in the bottom income quintile and OR of 2.94 (95% CI = 1.66–5.22) in the bottom asset quintile. Counter-intuitively, individuals living in households with lowest monthly consumption per capita had significantly lower probability of death (OR = 0.27, 95% CI = 0.20–0.38).ConclusionsMortality burden in India is largely patterned on economic dimensions as opposed to caste dimensions, though caste may play an important role in predicting economic opportunities.

Trajectories of Cognitive Function in Late Life in the United States: Demographic and Socioeconomic Predictors

This study used mixed-effects modeling of data from a national sample of 6,476 US adults born before 1924, who were tested 5 times between 1993 and 2002 on word recall, serial 7's, and other mental status items to determine demographic and socioeconomic predictors of trajectories of cognitive function in older Americans. Mean decline with aging in total cognition score (range, 0-35; standard deviation, 6.00) was 4.1 (0.68 standard deviations) per decade (95% confidence interval: 3.8, 4.4) and in recall score (range, 0-20; standard deviation, 3.84) was 2.3 (0.60 standard deviations) per decade (95% confidence interval: 2.1, 2.5). Older cohorts (compared with younger cohorts), women (compared with men), widows/widowers, and those never married (both compared with married individuals) declined faster, and non-Hispanic blacks (compared with non-Hispanic whites) and those in the bottom income quintile (compared with the top quintile) declined slower. Race and income differences in rates of decline were not sufficient to offset larger differences in baseline cognition scores. Educational level was not associated with rate of decline in cognition scores. The authors concluded that ethnic and socioeconomic disparities in cognitive function in older Americans arise primarily from differences in peak cognitive performance achieved earlier in the life course and less from declines in later life.

Income Mobility in the United States: New Evidence from Income Tax Data

While many studies have documented the long-term trend of increasing income inequality in the U.S. economy, there has been less focus on income mobility and the potential opportunity for upward mobility. Data from panels of individual income tax returns suggest that there was considerable income mobility in the U.S. economy over the 1987-1996 and 1996-2005 periods. Consistent with prior mobility studies, the data show that over half of taxpayers moved to a different income quintile and that roughly half of taxpayers who began in the bottom income quintile moved up to a higher income group by the end of each period. By contrast, those with the very highest incomes in the base year were more likely to drop to a lower income group and the median real income of these taxpayers declined in each period. Economic growth resulted in rising incomes for most taxpayers over both time periods. Initial position in the income distribution and changes in marital status were found to be associated with the largest upward or downward movements through the income distribution.

DOES COMPULSORY VOTING HELP EQUALIZE INCOMES?

This paper explores the link between compulsory voting and income distribution using a cross‐section of countries around the world. Our empirical cross‐country analysis for 91 countries during the period 1960–2000 shows that when compulsory voting can be strongly enforced the distribution of income improves as measured by the Gini coefficient and the bottom income quintiles of the population. Our findings are robust to changes and additions to our benchmark specification. Because poorer countries are the ones with relatively more unequal distribution of income it might make sense to promote such voting schemes in developing regions, such as Latin America. This, under the assumption that bureaucratic costs related with design and implementation are not excessive.

Risk Management of Pension Systems from the Perspective of Loss Aversion

This paper studies pension design from a risk management point of view using a lexicographic loss aversion model. Interest in this model stems from the fact that it explains income expansion paths of equity and total savings particularly well. I find that all income groups are likely to benefit from a PAYGO system, even in the absence of any redistribution. Optimal equity investments are close to zero for the two bottom income quintiles and increase sharply for higher incomes. The results are compared to optimal pension plans under HARA preferences. I find that a PAYGO system has higher value under loss aversion than in the HARA case. Moreover, equity shares correspond more closely to empirical observations.