Income Distribution Effects Research Articles

Does mortgage lending impact business credit? Evidence from a new disaggregated bank credit data set

Abstract We present a new data set for 74 economies over 1990–2016 on domestic bank credit distinguishing between four categories: household mortgages, household consumption credit, loans to non-bank financial institutions, and loans to non-financial business. We offer a description of sources and data collection methods and a comparison with similar data sets. We document the key data trends including a shift in bank credit allocation away from business lending. The literature suggests that this ‘debt shift’ has substantial consequences for growth, income distribution and macroeconomic resilience, which motivates the construction of a new data set. We apply the data to analyze the effect of an increase in mortgage lending flows on business credit flows. We identify several theoretical transmission channels which involve collateral and bank balance sheet effects and wealth effects on consumption. The impact of mortgage credit expansion on business credit growth is found to be positive in advanced economies and negative in emerging and developing economies.

Role of Financial Efficiency and Income Distribution on the Relationship Between Economic Growth on Poverty Levels in East Africa Community Countries

The study examined the relationship between economic growth, income distribution and poverty levels in East African Community countries. The specific objectives of the study included establishing the effect of economic growth on poverty levels in EAC countries and examining the moderating effect of income distribution on the relationship between economic growth and poverty levels in EAC countries. The study adopted both comparative and descriptive research designs. The study population was the five countries of EAC countries which included Kenya, Rwanda, Uganda, Burundi, and Tanzania. Annual data for 30 years beginning 1989 to 2018 was gathered for the study purpose. Secondary data, which consisted of annual data, was utilized in the study. The study employed normality, heteroscedasticity, multicollinearity, serial correlation, Optimal lag test, unit root diagnostic tests, cointegration test and cross sectional correlation test. The data was analyzed using both descriptive and inferential statistics with the help of excel and STATA version 14. Feasible Generalised Least Squares (FGLS) panel data regression models was used for hypotheses testing. The study results revealed that economic growth had a significant effect on poverty levels in East African Community countries. In addition, the study revealed that income distribution has a significant mediating effect on the link between economic growth and poverty levels in East African Community countries.

ANALISIS KEMISKINAN DI KAWASAN TIMUR INDONESIA

This study was conducted to analyze the effect of economic growth, income distribution, unemployment, education and health on poverty in Eastern Indonesia in 2013-2017. Independent variables used in this study are economic growth, income distribution, unemployment, education and health and poverty as dependent variable. The data used in this study are secondary data sourced from the Central Statistics Agency of Maluku Province consisting of time series data for 2013 - 2017 and cross section data for 12 provinces in Eastern Indonesia. The analytical method used is panel data regression analysis. The results showed that economic growth had a positive and not significant effect on poverty in Eastern Indonesia. Variable income distribution has a positive and not significant effect on poverty in Eastern Indonesia. The unemployment variable has a positive and significant effect on the poverty variable in Eastern Indonesia. Education and health variables have a positive and significant effect on poverty in Eastern Indonesia. The coefficient of determination is 0.993136, meaning that the poverty variable can be explained by variables of economic growth, income distribution, unemployment, education and health by 99.31%. Simultaneous test results (F test), showed variables of economic growth, income distribution, unemployment, education and health simultaneously had a significant effect on poverty in Eastern Indonesia.

Relationship between Income Distribution and Human Capital in Turkey: ARDL Boundary Approach and Analysis

Gelir dağılımı sorunu halen ülkelerin önemli bir sorunu olmaya devam etmektedir. Türkiye’nin dahil olmaya çalıştığı AB üyeleri ile kıyaslandığında gelir dağılımı daha ciddi bir sorun özelliği arz etmektedir. Türkiye bu sorunun etkilerini azaltmak için çeşitli ekonomi politikalara başvurduğu bilinmektedir. Ekonomide toplumsal adaleti sağlamak için yeniden dağıtım politikalarına başvurmak ilk akla gelen çözüm iken bunun ekonomik büyüme üzerinde neden olduğu olumsuz etkisi nedeni ile uygulama seçeneği sınırlı kalmaktadır. Ekonomik büyümeden fazla bir öndün vermeden bu amaç için en etkili seçeneklerden biri eğitimi bütün düzeylerde geliştirmektir. Bu bildiride özellikle gelir dağılımının yıllar içerisinde gösterdiği seyir ve bu seyirin oluşmasında etkili olan ekonomi politik analiz edilecek. Özellikle 1977-2014 döneminde ilköğretim, orta öğretim ve üniversite mezun sayısındaki artışın gelir dağılımı üzerindeki etkisini analiz etmek üzere ARDL sınır testi ile analiz edilmiştir. Elde edilen bulgu; bu iki değişken arasında uzun dönemli bir ilişki olduğu ve bu iki değişken arasındaki ilişkinin katsayısını tahmin edilen sonucu, eğitim endeksinde meydana gelen bir artışın gini katsayısını düşürücü yani gelir dağılımını iyileştirici etkiler göstermekte olduğu şeklindedir. Türkiye’de eğitime yönelik yapılan yatırımların literatürde bulguları destekler şekilde gelir dağılımının düzelmesine önemli düzeyde katkı yaptığı ortaya konulmuştur. Son olarak, eğitimin ekonomide daha etkin hale gelmesi için bazı politika seçenekleri önerilmiştir.

A two-sector Kaleckian model of growth and distribution with endogenous productivity dynamics

This study extends a two-sector Kaleckian model of output growth and income distribution by incorporating endogenous labour productivity growth. The model is composed of investment goods and consumption goods production sectors. The impact of a change in wage and profit shares on capacity utilisation and output growth rates at the sectoral and aggregate levels are identified. The study reveals short-run cyclical capacity utilisation rates and productivity growth dynamics. Even if the short-run steady state is stable, the capital accumulation rate in the consumption goods sector must decrease more than that in the investment sector for long-run stability. When simultaneous rises in profit shares in both the sectors affect long-run aggregate economic growth differently at a steady state, the distributional interests between the same class in different sectors may hamper the long-run economic growth. A policy message is that the effect of income distribution on industrial output growth is not always beneficial. These phenomena are specific to two-sector models and cannot be observed when using conventional aggregate growth models.

Endogenous cycles from income diversity, capital ownership, and differential savings

Abstract Endogenous cycles in standard growth models with capital accumulation of the Solow or the OLG type occur only when there is some degree of heterogeneity among consumers, differential savings, income diversity, or market specialization. Otherwise, without income effects or distribution effects long run steady states are mostly asymptotically stable predicting stable balanced growth for many of the commonly accepted growth models under most aggregative concave neoclassical production functions. This paper provides an attempt to exhibit a full richness of bifurcation scenarios for endogenously generated cycles using minimal extensions concerning preferences, technologies, and ownership of capital by extending the models of Kaldor, Pasinetti, and others to allow for ownership of capital among OLG consumers of workers and capitalists. It is shown that, under a sufficiently low but constant elasticity of substitution, the interaction of the nonlinear income distribution with heterogeneous logarithmic intertemporal preferences of consumers causes a variety of local bifurcation scenarios (Neimark–Sacker, fold, period doubling), multi-stability, as well as a rich variety of complex global dynamic features, such as homoclinic tangles, periodicity regions originating from Arnold tongues, closed curve attractors, and complex basins. The paper provides a detailed numerical analysis under a CES production scenario of several global bifurcations arising from heterogeneity which does not exist under the specific ownership restrictions imposed in the original Kaldor/Pasinetti models.

Financial liberalization and income inequality: A meta-analysis based on cross-country studies

The proposed income distribution effect of financial liberalization has gradually attracted the attention of academic economists, but the research results are inconsistent and even contradictory. This paper presents a quantitative review of these studies. The objectives are to assess the impact of financial liberalization on income inequality and to identify the sources of heterogeneity. A meta-analysis is performed with 23 empirical cross-country studies on the relationship between financial liberalization and income inequality, yielding a total of 556 estimates. We find overall support for the small negative relationship between financial liberalization and income inequality when considering potential publication bias and method heterogeneity. Our results suggest that different impact channels, institutional quality, the measurement used for financial liberalization and income inequality, and the use of different econometric methods are especially effective for explaining the differences in past study findings.

Effects of income distribution in an inverse demand system: evidence from Chinese household survey data

ABSTRACTThis study provides an empirical analysis of the impact of changes in income distribution on food demand in China using data from China Health and Nutrition Survey. A new parametric form of an inverse demand system is introduced and estimated taking into account reported zero consumption. This new form is a natural extension of recent works that accommodate the incorporation of income distribution into the system and imposition of global regularity conditions in estimation. Our results generally indicate that the distribution of households across income groups is important in determining food demand in China and that a movement towards a more equal income distribution in China will stimulate the demand for vegetable, fruit, fish and eggs.

The conditional effect of income distribution on mortality risk of men in Tunisia: Poverty effect or wealth effect?

The paper examines the conditional effect of income on mortality risk of men in Tunisia in a population based case-control survey study combining individual data from two databases on 11,231 survivors and 1,498 deceased. The main question addressed in the study is whether inequalities in health, as measured by mortality, in Tunisia mainly reflect the effects of poverty or are they caused by a socioeconomic gradient? Using logistic regression models with various income specification, our empirical findings provide strong evidence of an excess mortality associated with poverty, but also, unexpectedly, an under mortality associated with highest incomes. Beyond an absolute poverty effect, we fail to find support for the hypothesis of a concave relationship between income and mortality since we highlight a protective effect of the highest incomes. Besides, under the different income specifications estimation results confirmed the significant effect of income on mortality risk, regardless of the socio-professional categories effects. This effect is not limited to poverty, since the mortality risk decreases continuously throughout the income distribution calling into question the effects of socioeconomic gradient on mortality risk.

Income Distribution Effects of Carbon Tax in Chinese Provinces

中国では，工業化と都市化の進行に伴うエネルギー消費の増大により大気汚染問題が深刻化し，温室効果ガス（GHG）の排出量が急増している．そのため，今後，中国が持続可能な発展を遂げるには，「低炭素社会」への移行が欠かせない．

Income distribution and health: can polarization explain health outcomes better than inequality?

Utilizing data from the China Health and Nutrition Survey (CHNS) from 1991 to 2011, we aim to analyze the effects of income distribution on two risks for chronic diseases: body mass index (BMI) and blood pressure. Unlike the previous studies, we consider two different kinds of indicators of income distribution: inequality and polarization. Different from relative inequality indicators such as the Gini index, which measure income gaps only, the recently developed polarization indicator captures group clustering and social alienation, in addition to income gaps. Our empirical results demonstrate that both BMI and blood pressure are positively correlated with income polarization, while inequality is a weaker predictor of these health outcomes. Thus, polarization, rather than inequality, should be used when analyzing the relationship between health outcomes and income distribution. We also examine the polarization-to-health transmission mechanism using mediation and moderation analytic frameworks. The results suggest that social networks mediate the effect of polarization on BMI and neutralize the effect on blood pressure.

Income and spatial distributional effects of a congestion tax: A hypothetical case of Oregon

In US urban areas, traffic congestion remains a growing and costly problem. The Texas Transportation Institute estimated that in 2014 delays due to congestion caused an extra 7 billion extra hours in delay, leading to wasted fuel, increased environmental degradation, and high user costs. Previous studies have focused on the impacts to congestion via highway toll lanes and the income distributional effects of tolling. While tolling can be effective in reducing congestion levels, these tolls have been found to be at least as regressive as fuel taxes. Further, these studies do not investigate the impacts tolling has on rural households compared to urban households. This study presents a per-mile congestion tax as an alternative policy tool to congestion tolling. Using a Suits Index with the Oregon Households Activity Survey, we find a per-mile congestion charge to be progressive on income. This suggests that the administratively challenging toll revenue redistribution payments that would be necessary to make congestion tolling progressive would not be needed. At the same time, however, the Suits Index suggests that a per-mile congestion charge would be regressive with regards to rural households. Econometric models are estimated to further support and explain these outcomes. While rural households, in general, drive more during peak hours compared to urban households, we find that low-income rural households are less likely to drive during these periods than wealthier rural households.

The Impact of Technology Innovation on the Middle-Income Group: Heterogeneity of Technological Originality or Introduction Re-innovation

Under the innovation-driven development strategy, technology innovation has become the core driving force of economic development and income increase. Technology innovation contains technological originality and technological introduction re-innovation, which affects technological progress bias through factor efficiency, and then influences the middle-income group. This paper constructs a theoretical model to analyze the impact mechanism of technological originality and introduction re-innovation on the middle-income group, and proposes three research hypotheses. Using data in China, the impact of the heterogeneity between technological originality and introduction re-innovation on the middle-income group is empirically tested, so as to examine comprehensively the income distribution effect of technology innovation. Research findings are as follows: technological originality improves the income distribution, i.e., technological originality encourages the technological progress towards labor to increase labor income share, and enlarges the middle-income group and makes full use of the income distribution effect of technological originality; technological introduction will not be conducive to improve the income distribution in a long term, i.e., the income distribution effect of technological introduction is limited and unremarkable; moreover, technological introduction re-innovation exacerbates the income distribution, i.e., technological introduction re-innovation encourages technological progress towards capital, and capital reversal and reverse spillover is quite serious, which restraints the expansion of the middle-income group, leading to the ineffective income distribution of technological introduction re-innovation. This paper provides a reference for the analysis of the income distribution effect of technology innovation under an innovation-driven development mode and provides specific political implications for the impact of heterogeneity of technological originality and technological introduction re-innovation on the income distribution. Therefore, on the one hand, we should increase the investment in our original technology, especially on fundamental researches and talents, to improve the level and ability in original technology. Meanwhile, we should perfect the relevant systems and mechanisms of original technology to deliver its outcomes more effectively and put its function of adjusting the income distribution in full play. On the other hand, we should continue to attract foreign investment and import advanced technology, and make sure that the introduced technology could match the local technology and resources well. At the same time, we should put emphasis on imitating the foreign advanced technology to reduce the reverse spillover effect of the introduced and recreated technology, change the situation of the poor circulation of the introduced technology, and enhance the effect of the introduced and recreated technology on the income distribution.

Egyptian Economic and De-Democratization Trends

The literature on economic determinants of democratization has identified most importantly the effects of economic development and income distribution. In this regard, Egypt had exhibited higher average incomes and declining inequality between 1999 and 2012. However, by 2015, the level of income inequality had reverted near its level in 2008. Although income distribution data are not available for later years, trends in the composition of economic activity suggest that income inequality has likely continued to increase, disempowering the middle class further and contributing to de-democratization. A main puzzle during the build-up to the Arab Spring revolts of 2010-11 was the fact that income inequality in Tunisia and Egypt was relatively low in comparison to countries at similar stages of economic development. Especially for Egypt, this analysis had ignored the vast between-country and within-oil-exporting-country income inequalities, which, according to WID.world scholars' calculations, had rendered the Middle East the most unequal region in the world. Post-2011 trends have simultaneously integrated Egypt more closely with Gulf economies and transformed the Egyptian economy more closely to follow the investment patterns of the latter. Thus, the short-lived economic trends that fueled demands for democratization in Egypt have been reversed, underpinning the regression of her political system to resemble more closely those of her Gulf benefactors. Although large investments in infrastructure may potentially lead to enhanced productivity and economic re-empowerment of the middle class, past experiences of Gulf economies to which the Egyptian economy is converging suggest otherwise.

Approaches to Aggregation and Decision Making—A Health Economics Approach: An ISPOR Special Task Force Report [5

The fifth section of our Special Task Force report identifies and discusses two aggregation issues: 1) aggregation of cost and benefit information across individuals to a population level for benefit plan decision making and 2) combining multiple elements of value into a single value metric for individuals. First, we argue that additional elements could be included in measures of value, but such elements have not generally been included in measures of quality-adjusted life-years. For example, we describe a recently developed extended cost-effectiveness analysis (ECEA) that provides a good example of how to use a broader concept of utility. ECEA adds two features—measures of financial risk protection and income distributional consequences. We then discuss a further option for expanding this approach—augmented CEA, which can introduce many value measures. Neither of these approaches, however, provide a comprehensive measure of value. To resolve this issue, we review a technique called multicriteria decision analysis that can provide a comprehensive measure of value. We then discuss budget-setting and prioritization using multicriteria decision analysis, issues not yet fully resolved. Next, we discuss deliberative processes, which represent another important approach for population- or plan-level decisions used by many health technology assessment bodies. These use quantitative information on CEA and other elements, but the group decisions are reached by a deliberative voting process. Finally, we briefly discuss the use of stated preference methods for developing “hedonic” value frameworks, and conclude with some recommendations in this area.

Income Distribution Effect of Replacing Business Tax with VAT in China

Income Distribution Effect of Replacing Business Tax with VAT in China

The Research of Income distribution Effect of the Extending Coverage of the Basic Pension Insurance System in China

This paper uses a general equilibrium framework to establish a heterogeneity inter-temporal overlapping dynamic general equilibrium model of basic pension insurance system combining social pooling with personal accounts. Then it introduces the main content of Guo Fa [2005] No.38 and focuses on the income distribution and redistribution effects of the extending coverage of basic pension insurance system by policy simulation, parameter estimation, and sensitivity test. And it makes the theoretical derivation and empirical estimates. The results are shown as follows:firstly, the extending coverage of basic pension insurance system has significant income distribution and redistribution effects, and the redistribution effect is progressive, namely the income transformation from high earners represented by urban enterprise workers to low earners represented by flexible employees and migrant workers; secondly, personal accounts have played a smoothing role, which help to improve lifetime income distribution of different types of workers, but are not conducive to the improvement of income redistribution; thirdly, social pooling accounts have a strong income redistribution effect, which are in favor of income redistribution between different types of workers and narrow the income gap. Parameter sensitivity tests show that the conclusions are robust. Therefore, further optimization of social pooling accounts helps to reduce income inequality.

The Impact of Income Distribution and Agricultural Credit Facilities on Rural-Urban Migration

The Impact of Income Distribution and Agricultural Credit Facilities on Rural-Urban Migration

Poverty, Income Distribution, and Government Policy that Pro-Poor in Indonesia year 2009-2016

This study aims to determine the effect of growth and distribution on poverty change as well as to analyse whether expenditure growth has given the benefits to the poor and non-poor in urban and rural area. The data used are raw data from total household consumption obtained from National Socio-Economic Survey for the period of 2009 to 2016. Poverty decomposition is used to see the effect of income growth and distribution on the poverty change. Furthermore, Poverty Equivalent Growth Rate (PEGR) supported by Growth Incidence Curve (GIC) is used to determine whether the benefit of economic growth is enjoyed more by the poor compared to pro-poor growth or not. The results show that income growth influences the decrease in poverty both in rural and urban area in Indonesia, during 2009-2016, 2009-2014 and 2014-2016. Conversely, the distribution of income increases the poverty in both areas during the periods. Inequality of income seems to give a strong influence so that the economic growth has not been a pro-poor both in rural and urban area of Indonesia during 2009-2016, 2009-2014 and 2009-2016.

Poverty, Income Distribution, and Government Policy that Pro-Poor in Indonesia year 2009-2016

This study aims to determine the effect of growth and distribution on poverty change as well as to analyse whether expenditure growth has given the benefits to the poor and non-poor in urban and rural area. The data used are raw data from total household consumption obtained from National Socio-Economic Survey for the period of 2009 to 2016. Poverty decomposition is used to see the effect of income growth and distribution on the poverty change. Furthermore, Poverty Equivalent Growth Rate (PEGR) supported by Growth Incidence Curve (GIC) is used to determine whether the benefit of economic growth is enjoyed more by the poor compared to pro-poor growth or not. The results show that income growth influences the decrease in poverty both in rural and urban area in Indonesia, during 2009-2016, 2009-2014 and 2014-2016. Conversely, the distribution of income increases the poverty in both areas during the periods. Inequality of income seems to give a strong influence so that the economic growth has not been a pro-poor both in rural and urban area of Indonesia during 2009-2016, 2009-2014 and 2009-2016.