High-income Workers Research Articles

Urban Transit Infrastructure and Inequality: The Role of Access to Non-Tradable Goods and Services

With 68% of the world population projected to live in urban areas by 2050, mass transit networks are expanding faster than ever before. But how are the economic gains from such expansions being shared between low- and high-income workers? Existing research focuses on the role of commuting to work, however much of urban travel is related to the consumption of non-tradable goods and services (retail, F&B, personal services etc.). Since low-income workers are overwhelmingly employed in these non-tradable sectors, changes in consumption travel patterns in response to a transit expansion leads to a spatial re-organization of low-income jobs in the city which has important implications for inequality. This paper develops an urban spatial model with heterogeneous worker groups and incorporating travel to consume non-tradable goods and services. We estimate our model using detailed farecard and administrative data from Singapore to quantify the impact of the Downtown Line (DTL). We find large welfare gains for high-income workers, but near zero gains for low-income workers. All workers benefit from improved access to consumption opportunities, but low-income non-tradable sector jobs move to less attractive workplaces. Abstracting away from consumption travel results in a five-fold underestimation of the inequality effects and failure to capture the spatial re-organization of low-income jobs in the city.

What If Working from Home Will Stick? Distributional and Climate Impacts for Germany

The COVID-19 pandemic created the largest experiment in working from home. We study how persistent telework may change energy and transport consumption and costs in Germany to assess the distributional and environmental implications when working from home will stick. Based on data from the German Microcensus and available classifications of working-from-home feasibility for different occupations, we calculate the change in energy consumption and travel to work when 15% of employees work full time from home. Our findings suggest that telework translates into an annual increase in heating energy expenditure of 110 euros per worker and a decrease in transport expenditure of 840 euros per worker. All income groups would gain from telework but high-income workers gain twice as much as low-income workers. The value of time saving is between 1.3 and 6 times greater than the savings from reduced travel costs and almost 9 times higher for high-income workers than low-income workers. The direct effects on CO2 emissions due to reduced car commuting amount to 4.5 millions tons of CO2, representing around 3 percent of carbon emissions in the transport sector.

COVID-19: Are you satisfied with traveling during the pandemic?

The outbreak of COVID-19 and preventive measures to limit the spread of the virus has significantly impacted our daily activities. This study aims to investigate the effect of daily activity engagement including travel activity and sociodemographic characteristics on travel satisfaction during COVID-19. This study develops a latent segmentation-based ordered logit (LSOL) model using data from the 2020 COVID-19 Survey for Assessing Travel Impact (COST), for the Kelowna region of British Columbia, Canada. The LSOL model accommodates the ordinal nature of the satisfaction level and captures heterogeneity by allocating individuals into discrete latent segments. The model results suggest that the two-segment LSOL model fits the data best. Segment one is more likely to be younger and older high-income workers; whereas, segment two includes middle-aged lower-income, unemployed individuals. The model results suggest that daily activity engagement and sociodemographic attributes significantly affect travel satisfaction. For example, participation in travel for routine shopping, recreational activity, and household errands has a positive effect on travel satisfaction. The use of transportation modes like bike/walk depicted a higher probability to yield travel satisfaction. The model confirms the existence of significant heterogeneity. For instance, travel for work showed a negative relationship in segment one; whereas, a positive relationship is found in segment two. Access to higher household vehicle yield lower satisfaction in segment one; in contrast, a positive relationship is found in segment two. The findings of this study provide important insights towards maintaining the health and well-being of the population during this and any future pandemic crisis.

Why Employment During and After COVID-19 Is a Critical Women's Health Issue.

Why Employment During and After COVID-19 Is a Critical Women's Health Issue.

Progressive Income Tax and Comparative Advantage in Trade

We show in the world trade data that countries with more progressive personal income tax system are less likely to have comparative advantage in industries that employ a greater share of high-income occupations, such as high-tech industries and professional services. Moreover, when countries increase their income tax progressiveness over time, they lose comparative advantage in sectors that use high-paying occupations intensively. We propose two theoretical mechanisms to explain these empirical observations: one is the occupational choice model based on the trade-off between the wage and leisure in the Heckscher-Ohlin framework; the other is the Heckscher-Ohlin model with international immigration of high income workers. Both models demonstrate that progressive income tax pushes workers away from high-income occupations and undermines the comparative advantage in industries that rely heavily on these occupations. Policy makers need to consider the side effect of income tax on industry competitiveness in the global market when fighting inequality.

Would you rather teleport or spend some time commuting? Investigating individuals’ teleportation preferences

The “teleportation test” is a unique question—used in some travel behavior research since the 2000s—to examine individuals’ perceptions towards travel time and affinities for travel. It gives people a hypothetical choice between teleporting or spending some time traveling. All studies (using different methods, including focus groups, interviews, and questionnaires) have consistently reported high teleportation preferences (about 70%). Yet, few correlates of teleportation preferences (especially sociodemographic and perceptual characteristics) have been investigated. Using data from an online questionnaire of 648 commuters in Portland, Oregon, this study investigated factors affecting individuals’ teleportation preferences. While generally representative of the area’s commuters, the sample did have higher shares of high-income workers and people using active modes or transit. Overall, 62% of respondents preferred to teleport than to spend some time commuting. Results from binary logit models identified actual commute duration, typical mode of travel, and “ideal” travel time (but no demographic attributes) as major predictors of preferences to teleport. As expected, people with longer commute durations had a greater desire to teleport, whereas bicyclists and pedestrians more often preferred to commute. People with longer ideal travel times had a greater affinity to commute and were less keen to teleport. Analysis of follow-up questions exploring reasons for respondents’ answers suggested that most “teleporters” were motivated by saving time to do other things, while most “commuters” found parts of their commutes to be enjoyable or productive. Findings from this study are consistent with related studies in implying that a teleportation preference does not necessarily represent zero ideal travel time or viewing travel time as wasted. Finally, this study discusses several travel behavior policy implications of the teleportation test, along with limitations and areas for future research.

Health Risk Disparities among Employed Adults with COPD Living in Central Appalachian U.S. States

ABSTRACT Background Little is known about risk factors associated with poor health among employees with COPD living in Central Appalachia. Purpose: Determine variability in health distress based on risk factors, including race and income, among employees with COPD from Central Appalachian U.S. States. Methods: 2016–2017 BRFSS data were analyzed from employed adults with COPD living in KY, NC, TN, and WV (N = 1,326). Health risks included (1) comorbidities; (2) substance use/abuse; and (3) limited healthcare access as predictors of mental and physical distress, with race and income entered as covariates. Results: Respondents reporting several comorbidities were more likely to report physical and mental distress compared to those without comorbidities. Workers who used e-cigarettes on some versus no days were more likely to report physical distress. Those reporting cost preventing access to medical care versus no cost barriers were more likely to report physical and mental distress. Low-income workers were more likely than higher-income workers to report distress. Discussion: Comorbidities, e-cigarettes, and high medical costs are potential causes of occupation-related disability among employees with COPD working in Central Appalachian U.S. States. Translation to Health Education Practice: Worksite interventions should address risks negatively associated with health outcomes among workers with COPD from Central Appalachia.

Policy, Partisanship, and Pay: Diverging COVID-19 Responses in Indonesia

Results from a nationally representative telephone panel survey of 2,000 adult Indonesians conducted from 19 to 22 May by Indikator indicate that local social-distancing policies, social class, and political partisanship affect how Indonesians experience the COVID-19 pandemic and what they believe about the government’s response. In particular: 1. Economic disruptions are hitting low-paid workers most. Better-paid Indonesians are experiencing few employment changes, while the worst-paid are seeing their incomes dry up. 2. Fear levels are much higher among the lowest-paid Indonesians. They report higher rates of life disruption and greater health precautions. Most respondents report taking health precautions, but there are important partisan differences. 3. The potential “work from home” population is negligible. Higher-income workers are the most likely to report not staying at home more, a result driven by their continued employment. 4. Evaluations of provincial and presidential pandemic response are generally favorable, with some partisan differences. The health ministry scores poorly. 5. Where there have been conflicts between local and national health authorities, partisanship is a much stronger predictor of respondents’ evaluations. Greater compliance may be achieved by giving popular governors more freedom to set restrictive local lockdown policies.

Hunting for Talent: Firm-Driven Labor Market Search in America

Research suggests that increased digitization of the labor market combined with the changing demand for skill has altered the job-search process. In this article, we argue that these changes have led to increased investments in firm-driven search for talent (or `outbound recruiting'). We investigate this question using two data sets, one new. First, we conduct a nationally representative survey of over 13,000 American workers. We find that nearly 18 percent of all employed workers in the US were hired into their present company by the outbound recruiting effort their employer, either directly or through labor market intermediaries such as a headhunter. The share of hiring driven by firm-driven search is greatest among higher-income workers, at 20.3 percent, and those with STEM and business degrees, at 20 percent. Moreover, considerable regional variation exists. For example, over a quarter of Silicon Valley workers are hired in this manner, whereas only 14.5% of those in Rochester are. Second, we complement our worker-level results by analyzing a large sample of job postings in the US economy over the past decade. We find that firms, especially those relying on high-skilled labor, are increasingly developing capabilities to better hunt for talent — hiring more recruiters with skill in online search. Given the growth of this practice, we discuss implications for research on firm strategy and labor markets.

Effects of minimum wage on workers’ on-the-job effort and labor market outcomes

Can higher minimum wages motivate workers to work harder? If so, what are the effects of workers’ on-the-job effort responses on the labor market outcomes? To answer these questions, we apply a model with directed on-the-job search and dynamic incentive contracts in a frictional labor market. The steady-state comparison of the calibrated model shows that a higher minimum wage increases workers’ on-the-job effort. It also reduces the average hiring and layoff rates. Since the reduction in the hiring rate is higher than the reduction in the layoff rate, the un-employment rate increases, and hence lowers the aggregate output. Moreover, we find that the higher minimum wage has a spillover effect on higher-income workers. It suggests that agents’ incentive decisions can provide a new explanation of the spillover effect of the minimum wage. Lastly, shutting down the effort channel leads to greater labor market impacts. These results suggest that workers’ on-the-job effort responses have moderate offsetting effects on the cost of the higher minimum wage.

Entrepreneurship Among Low-, Mid- and High-Income Workers in South America: A Fuzzy-Set Analysis

This paper studies the reasons underlying the entrepreneurial decisions of low-, middle-, and high-income workers in South America. Using data from the GEM APS for the period 2005-2017, we apply fuzzy set Qualitative Comparative Analysis, allowing us to find causal links in the form of necessary conditions linked to entrepreneurship in the sample countries. Results show some differences in the conditions that lead individuals to become entrepreneurs, depending on income levels and gender. However, peer effects, the social perception of entrepreneurship, entrepreneurial skills, and formal education seem decisive in different contexts, although they may operate in both complementary and substitutive ways. The same combination of conditions does not appear to work for all the countries, even when taking into account the gender and income level of workers.

Low-Income Workers, Residential Location, and the Changing Commute in the United States

Numerous reports suggest that rising rents in some U.S. metropolitan areas are pushing workers to live further from their workplaces over time and contributing to lengthening commutes. Drawing on data from the last three vintages of the U.S. National Household Travel Survey (2001, 2009, and 2017), we test whether the relationship between residential location and commute distance varies significantly between low-income and higher-income workers and has changed over time. The data show that commute distances have increased for both low- and higher-income workers with much of the increase occurring in lower density areas. Statistical models show a strong positive relationship between living in a low-density neighbourhood and commute distance for all workers. This relationship appears stronger for low-income than higher-income workers but the strength of the relationship has not increased over time. The findings suggest that the growth in commute distance among low-income workers is largely due to a shift in their residential location towards low-density neighbourhoods.

Income and Effort: An Instrumental Variables Approach

Does income affect how much people value effort? If income has a negative causal effect on how much effort is valued, an increase in income will adversely affect the cultivation of a growth mindset. Achievement will then be affected because intelligence, abilities, skills, and intrinsic motivation are affected. By utilizing data from the 2010 Chinese General Social Survey, this paper shows that doubling income reduces the probability of an individual valuing effort by two to three percentage points. This study is the first to examine the effect of income on how much effort is valued. It addresses the endogeneity of income by using the regional unemployment rate, regional Consumer Price Index, and regional retail growth rate as instruments. Placebo tests were performed to evaluate the validity of the instruments. The negative causal effect of income on how much effort is valued implies that creating an environment where intrinsic motivations can flourish is of greater importance among higher income workers. Promoting employees with higher income may have a negative effect on engagement through the cultivation of a growth mindset.

Direct modeling of subway ridership at the station level: a study based on mixed geographically weighted regression

Station-level ridership modeling is one of the ways to forecast metro ridership and reveal how factors influence ridership. Previous studies assumed that the relationships between the dependent variable and independent variables are either global or local, as indicated by the global model or the geographically weighted regression (GWR) model. This study explores the possibility that some independent variables have spatially varying relationships with metro ridership while others have constant relationships by employing the mixed GWR model. Data from the Chicago metro system were used. To establish an effective forecasting model, possible influencing factors are collected. OLS model results indicate that the proportion of recreational jobs to total jobs, number of bus stops, employment density, number of high-income workers, and the type of station (transfer or terminal) are significant variables influencing station-level metro ridership. By using the mixed GWR model, we find that the proportion of recreational jobs to total jobs is a global variable while the others are local variables. By comparing the results of mixed GWR, full GWR, and OLS models, we find that mixed GWR fits the data better and the residuals are less correlated. However, results of cross-validation indicate that the prediction power of the OLS model is better than that of the full and mixed GWR models.

Diverging identities: a model of class formation

Abstract This paper is an application of Identity Economics. Since the literature in this field is recent, the paper begins with an extensive review of the key contributions. The current paper analyses the process and psychological costs of social polarization arising from economic inequalities. It may have some application to the current social divisions evident in the votes for Brexit and Donald Trump, and protest movements such as the gilets jaunes. In a simple model, people rationally maximize their utility from esteem, by selecting a subjective salient identity from two objective identities: nationality and job. The model shows how an increase in wages for the upper half of the population can lead those with high incomes to drop nationality as their salient identity, forming a new ‘elite’ class. This rational switch in the identity of high-income workers has efficiency and redistributive effects, reducing aggregate utility and generating regressive transfers.

Taxation and Migration: Evidence and Policy Implications

In this article, we review a growing empirical literature on the effects of personal taxation on the geographic mobility of people and discuss its policy implications. We start by laying out the empirical challenges that prevented progress in this area and then discuss how recent work has made use of new data sources and quasi-experimental approaches to credibly estimate migration responses. This body of work has shown that certain segments of the labor market, especially high-income workers and professions with little location-specific human capital, may be quite responsive to taxes in their location decisions. When considering the implications for tax policy design, we distinguish between uncoordinated and coordinated tax policy. We highlight the importance of recognizing that mobility elasticities are not exogenous, structural parameters. They can vary greatly depending on the population being analyzed, the size of the tax jurisdiction, the extent of tax policy coordination, and a range of non-tax policies. While migration responses add to the efficiency costs of redistributing income, we caution against overusing the recent evidence of (sizeable) mobility responses to taxes as an argument for less redistribution in a globalized world.

Taxes and Rents: The Power of Tax Policy to Shape the Distribution of Pre-Tax Income

Much of the legal academic tax policy analysis of the last 40 years inhabits the “classical optimal tax framework,” in which desires for government spending and redistribution are balanced against the theoretical economic costs of high tax rates. While this analytic frame can be useful, it has historically been anchored to antiquated assumptions that are contrary to modern economic research. The result has been a literature that overemphasizes the theoretical economic costs of taxation, while radically underestimating the role of taxes in regulating economic inequality. This article brings together recent advances in the economics literature with evidence from other disciplines to make the case that, rather than discouraging productive activity, progressive tax rates may instead discourage rent-seeking behaviors by high-income workers, leaving more compensation on the table for lower-income workers to share. In this way, progressive tax policy can be understood not only as redistributing income through direct transfers ex post, but also as regulating the distribution of market income ex ante, with high marginal tax rates reducing market-income inequality, and comparatively low rates encouraging the upward redistribution of resources. The article situates these insights within the broader tax literature and demonstrates their profound ramifications for multiple areas of tax scholarship.

POVERTY CHALLENGE TO GOVERNMENT MEGACITY PROJECT: ASSESSMENT OF WORKER’S WELL BEING IN LAGOS STATE NIGERIA

In order to make Lagos state a clean and habitable environment, successive democratic governments since 1999 have introduced ‘megacity policy’. The most important of government initiatives of the megacity agenda are constructions of all major and access roads, provision of beautiful surroundings and landscapes and the building of the Lagoon city in the sand-filled areas along the Atlantic Ocean and Lagos lagoon. Government official have consistently claimed that Lagos Megacity project isto provide infrastructure and make the city habitable for low, medium and high income workers and the elites. However big projects were mainly provided in selected areas in the Lagos Island, mainland and other areas where the elites and the rich live. Shanty towns, ghettoes and slums where most Lagos workers live have not really beneffited. This paper examines the challenge which increasing povertyposes to the megacity project. Descriptive method is employed to assess poverty among the Lagos workers. Residential areas were randomly selected and official records were used. Worker’s income is assessed based on prevailing inflation and average earned wages, 672 households’ headsin VIP areas and 1537 in ghettoes, slums and shanty towns were interviewed for the study for two days in week for 24 months between 2015-2017. Affordability of foods, housing, access roads, hospital, schools, sewage system, toilet facilities, waste and refuse disposal and others were used formulate questions directed to measure the wellbeing of individual households of Lagos workers. Findings reveal that governments Lagos megacity projects have led to the provisions of many infrastructures and social services such as roads, schools, hospitals, housing and beautiful landscapes in few areas in the main city, but government efforts to provide the same in all identified ghettoes, slums and shanty towns that dotted many areas in the suburbs where most of the low income workers live have not been quite effective. The paper concludes that megacity projects have not really improved the wellbeing of the Lagos workers. The paper recommends that government should implement megacity policy to improve the wellbeing of large section of its increasing population most especially poor workers in order to reduce the present and future ugly effect of poverty in Lagos state.

Does compulsory superannuation disadvantage middle income earners?

This article provides a simulation analysis of the effect of key elements of the superannuation tax regime on the working lifetime financial assets and consumption profile for low, medium and high income workers. The analysis is motivated by ongoing proposals by various stakeholder groups for changes to the taxation of superannuation contributions and superannuation fund income. A whole of working life approach is important because workers are affected to different degrees by the taxation of superannuation as their income changes over their working lives. The key result is that medium earners gain least from the compulsory Superannuation Guarantee Levy compared with low and higher earners, and this applies also under a number of proposed changes to the taxation of contributions and superannuation fund income. The gains are measured in terms of retirement assets for given levels of consumption and saving, and in working life consumption possibilities for a given level of retirement assets.

Affordable Care Act's Cadillac Tax Could Affect One-Fourth Of Workers With Employer Health Coverage By 2025.

The excise tax on high-cost health insurance plans (known as the Cadillac tax) under the Affordable Care Act (ACA) is an important part of the law's attempt to control rising health care costs. Analysts using different data sources have come to divergent estimates of how many people would be affected by this tax. We used the National Compensation Survey from the Bureau of Labor Statistics, which is better suited to this analysis because of its law-relevant details on employer-provided health benefits. Our research clarifies an important area of empirical uncertainty, thereby informing the debate about the ACA and its proposed replacements. Our base estimate of impact, 12percent of workers participating in employer-provided health plans in 2020, lies in the middle of other estimates, but it is considerably more comprehensive, accurate, and delineated by worker characteristics (region, number of employees at the firm, industry, occupation, and so on) than others. Workers affected at the highest rate include those in education occupations and high-income workers, while those in industries involving manual labor and public safety are affected at some of the lowest rates.