Income Percentile Research Articles

Influencing Factors of the Informal Investment in Central Europe

Abstract This paper examines the influencing factors of becoming informal investors in two groups of Central European countries: the innovation-driven (Estonia, Latvia, Slovenia and Slovakia) and efficiency-driven economies (Croatia, Hungary, Lithuania, Poland and Romania), based on the GEM (Global Entrepreneurship Monitor) database from 2014. According to the results, in the studied innovation-driven economies of Central Europe the probability of becoming an informal investor is higher for those, who know other entrepreneurs, who are confident in their own entrepreneurial skills, who are in the higher percentile of the household income, who are older and male. The results also suggest that in the studied efficiency-driven economies of Central Europe the probability of becoming an informal investor is higher for those who are confident in the own entrepreneurial skills, who know other entrepreneurs, who are in the higher percentile of the household income, who are older and male. The probability is decreased, if somebody is employed full-time. The study emphasises similarities instead of differences regarding the analysed aspect between the two groups of countries.

Income and Poverty in the COVID-19 Pandemic

:This paper addresses the economic impact of the COVID-19 pandemic by providing timely and accurate information on the impact of the current pandemic on income and poverty to inform the targeting of resources to those most affected and assess the success of current efforts. We construct new measures of the income distribution and poverty with a lag of only a few weeks using high-frequency data from the Basic Monthly Current Population Survey (CPS), which collects income information for a large, representative sample of US families. Because the family income data for this project are rarely used, we validate this timely measure of income by comparing historical estimates that rely on these data to estimates from data on income and consumption that have been used much more broadly. Our results indicate that at the start of the pandemic, government policy effectively countered its effects on incomes, leading poverty to fall and low percentiles of income to rise across a range of demographic groups and geographies. Simulations that rely on the detailed CPS data and that closely match total government payments made show that the entire decline in poverty that we find can be accounted for by the rise in government assistance, including unemployment insurance benefits and the Economic Impact Payments. Our simulations further indicate that of those losing employment the vast majority received unemployment insurance, though this was less true early on in the pandemic, and receipt was uneven across the states, with some states not reaching a large share of their out of work residents. Updated results during the pandemic for a subset of the tables in this article can be found at povertymeasurement.org.

There goes the neighborhood does tipping exist amongst income groups?

The ‘tipping point’ model of segregation Schelling (1971) has rarely been tested for socioeconomic variables besides race. Using US Census data from 1970 to 2010, I find evidence for tipping behavior amongst income groups. This is strongest when the population is split at the 10th percentile of income. In this case, average tipping points range from 7 to 12%. When the proportion of people below the 10th percentile in a neighborhood exceeds said tipping point, the decrease in those above the 10th percentile will be from 5 to 14%. Robustness checks indicate that these effects are not misinterpreted racial tipping points, nor a result of peoples’ income percentile changing over their lifetime. Effects are strongest in neighborhoods with more school-aged children, suggesting that income tipping is driven by concerns that the provision of local public goods could drop from an influx of lower class residents.

“Left Behind?” Financialization and Income Inequality Between the Affluent, Middle Class, and The Poor

There is increasing scholarly evidence that financialization has contributed to rising income inequality, especially by concentrating income among the affluent and rich. There is less empirical research examining who is losing out to the affluent. This paper fills this gap by examining how three measures of financialization (finance, insurance, and real estate or FIRE employment; credit expansion; and financial crises) affect upper‐tail (measured as the ratio between the 90th and 50th income percentiles) and lower‐tail (measured as the ratio between the 50th and 10th income percentiles) income inequality. Using concepts from economic sociology and the social stratification literature, I develop a perspective that links financialization to income inequality by creating more unequal market incomes while simultaneously reducing redistribution and social transfers. I analyze disposable household income data (after taxes and transfers) from the Luxembourg Income Study (LIS) and other public sources like the OECD from 16 affluent nations between the years 1981 and 2011, and I use an unbalanced panel design due to LIS data coverage. I find that the relative incomes of both the middle class and the poor are hurt by financialization (strongest evidence tied to FIRE employment); however, relative incomes of the poor are especially sensitive to financialization.

AN INTERNATIONAL COMPARISON OF INCOME DISPARITIES BY PROBLEM-SOLVING SKILLS, GENDER, AND AGE

Income disparities by gender have been a persistent problem in economically-developed countries for decades, with income gaps often widening over the adult life course. We use data from the 2012 Program for the International Assessment of Adult Competencies (PIAAC) to examine relationships among problem solving skills in technology-rich environments (PSTRE), income, sex, and age in Australia, Canada, England/Northern Ireland and the United States. Women age 35 to 44 in the middle-to-high (i.e., 50th - 75th percentile) income group had significantly higher PSTRE scores than their male counterparts in Australia and Canada. For the same income group, women ages 55 to 65 had significantly higher. PSTRE scores than men in Canada and England/Northern Ireland. These results suggest that women with similar skills lagged their male counterparts in income in specific sub-populations in specific countries. We provide possible explanations for these differences and conclude with implications for policy and practice.

1170 The Socioeconomic Impact on Presentation and Clinical Course of Celiac Disease

INTRODUCTION: Treatment for Celiac Disease (CD) involves lifelong elimination of dietary gluten1. Compliance to a gluten-free diet (GFD) relies on purchasing gluten-free foods, which are commonly more expensive than their gluten-containing counterparts2. This study aimed to determine whether household income affects patients’ adherence to GFD and mucosal healing. METHODS: This is a single center retrospective chart review at an urban tertiary hospital. Any adult patient diagnosed with CD was included, with the exception of those without clear documentation of initial presentation. Outcomes included demographic information, socioeconomic data, GFD adherence, and pathologic and laboratory findings of CD. Using patient zip code, cohorts were stratified by US Census Bureau household income percentiles: low income (LI) (1st-50th percentile of US income), medium income (MI) (50th-70th percentile of US income) and high income (HI) (70th-99th percentile of US income). RESULTS: 193 patients diagnosed between 1999 – 2017 were included and categorized into LI (n = 49), MI (n = 95) and HI (n = 49). LI presented at an older age (39.8 yr in LI; 39.5 yr in MI; 38.4 yr in HI) with a higher proportion of patients with Marsh 3A or greater classification (68.8% in LI; 68.0% in MI; 57.7% in HI). Non-adherence to GFD was noted to be highest in LI (16.3% in LI; 4.7% in MI, 0.0% in HI). Subsequently, LI was found prolonged mucosal healing (79.2 mo. in LI; 44.3 mo. in MI; 33.5 mo. in HI). HI had the lowest percentage of patients with Marsh 3A or greater classification on repeat encounters (25.7% in LI; 36.6% in MI; 14.3% in HI). Normalization of TTG IgA (69.2% in LI; 72.0% in MI; 84.6% in HI) and gliadin IgA (20.0% in LI; 75.0% in MI; 85.7% in HI) occurred more frequently in HI. CONCLUSION: Discussion: GFD remains a staple in the management of CD. Our study sought to evaluate the impact of socioeconomic status on GFD adherence, severity of CD, and mucosal healing. The LI group was noted to be less adherent with GFD, have more severe disease presentation, have longer time to mucosal healing, and have less normalization of TTG IgA and gliadin IgA. Future studies may focus on further determining the causation between socioeconomic status, GFD adherence and CD outcomes.

Measuring Malaysian housing affordability: the lifetime income approach

PurposeThe purpose of this paper is to measure the long-run housing affordability of Malaysia over time for households at various income levels and to demonstrate how short- and long-run affordability measures can reach contradicting conclusions.Design/methodology/approachIn this study, a long-run housing affordability index (HAI) for Malaysia was constructed for the sample period 1995 to 2014, using data from house prices and household incomes. The HAI was also modified to compute a mortgage affordability index (MAI) to account for intergenerational transfers.FindingsThe results show that households at the 25th income percentile cannot afford any of the four dwelling types in Malaysia. For households at the 40th income percentile and the median income levels, high-rise and terrace housing are affordable. However, significant downward trends in HAI and MAI are documented beginning 2009, which indicates increasing housing stress for households at or below the median income. The short-run affordability measure represented by the median multiple (MM) indicator showed bleaker conclusion for housing affordability, with all dwelling types considered unaffordable over the entire sample periodPractical implicationsOn the basis of the empirical results, this paper provided several long-term proposals to ameliorate the housing affordability problem in Malaysia.Originality/valueWith the MM ratio being the official affordability measure reported for Malaysia, this study introduces the nation’s first long-run housing affordability measure. It is hoped that this long-run measure will achieve widespread adoption in Malaysia. Given the deteriorating long-term affordability, this study offers several possible long-term solutions.

Pediatric-Adapted Liking Survey (PALS): A Diet and Activity Screener in Pediatric Care.

Clinical settings need rapid yet useful methods to screen for diet and activity behaviors for brief interventions and to guide obesity prevention efforts. In an urban pediatric emergency department, these behaviors were screened in children and parents with the 33-item Pediatric-Adapted Liking Survey (PALS) to assess the reliability and validity of a Healthy Behavior Index (HBI) generated from the PALS responses. The PALS was completed by 925 children (average age = 11 ± 4 years, 55% publicly insured, 37% overweight/obese by Body Mass Index Percentile, BMI-P) and 925 parents. Child–parent dyads differed most in liking of vegetables, sweets, sweet drinks, and screen time. Across the sample, child and parent HBIs were variable, normally distributed with adequate internal reliability and construct validity, revealing two dimensions (less healthy—sweet drinks, sweets, sedentary behaviors; healthy—vegetables, fruits, proteins). The HBI showed criterion validity, detecting healthier indexes in parents vs. children, females vs. males, privately- vs. publicly-health insured, and residence in higher- vs. lower-income communities. Parent’s HBI explained some variability in child BMI percentile. Greater liking of sweets/carbohydrates partially mediated the association between low family income and higher BMI percentile. These findings support the utility of PALS as a dietary behavior and activity screener for children and their parents in a clinical setting.

Przychody pierwotne a nierówności dochodowe w krajach wschodzących

Do potencjalnych przyczyn wzrostu nierówności dochodowych zalicza się procesy globalizacyjne, w tym migracje ekonomiczne i BIZ. Dotychczasowe badania koncentrowały się na związku między nierównościami dochodowymi a przepływami osób i kapitału. Niewiele uwagi poświęcano generowanym przez nie transferom dochodów rejestrowanym na rachunku obrotów bieżących jako dochody pierwotne. Dotychczasowe analizy poświęcone tym zagadnieniom skupiają się na skutkach transferów dochodów migrantów do kraju pochodzenia i odnoszą się głównie do krajów słabo rozwiniętych. W niniejszej pracy przeanalizowano zależność między przychodami pierwotnymi a nierównościami dochodowymi za pomocą narzędzi kointegracji panelowej dla sześciu krajów wschodzących: Polski, Czech, Egiptu, Rosji, Turcji i Chile. W odróżnieniu od większości dotychczasowej literatury za miernik nierówności dochodowych przyjęto udział najwyższego centyla w dochodzie narodowym wyznaczony na podstawie danych fiskalnych (baza danych WID). Wyniki analizy wskazują na długookresową, dodatnią zależność pomiędzy udziałem przychodów pierwotnych w PKB a udziałem najwyższego centyla w dochodzie narodowym. Wzrost (spadek) udziału przychodów pierwotnych w PKB stanowi ponadto długookresową przyczynę wzrostu (spadku) nierówności dochodowych. Otrzymane wyniki są odporne na zmianę metody estymacji (CCE, DOLS, VECM). Ograniczeniem niniejszej pracy jest niezadowalająca dostępność porównywalnych danych na temat badanych kategorii, utrudniająca rozszerzenie analizy na większą liczbę krajów wschodzących.

A Micro-Level View of Housing Affordability in Malaysia Using an Age Cohort-housing Type Analysis

Housing affordability has been an important issue for both developed and developing countries. Prior literature has used the price-income ratio as the main standard to assess housing affordability with the median disposable household income of the sample population commonly used. As such, conclusions drawn from macro-level analyses lack practical policy considerations. This paper attempts to address the problem in greater detail by considering age cohorts, income percentiles and different house types. The results show that for those aged 20-24 and 60-64, housing is severely unaffordable across all house types, except for the 75th income percentile group. The most expensive – semi-detached and detached housing types – remain unaffordable to all income and age groups, except for the 75th income percentile group aged 30 and above. Terrace and high rise housing types are the most affordable across each income percentile. Based on the results, we extend the housing affordability literature through recommendation of several policy measures that may ameliorate the affordability conundrum.

Family income and nutrition-related health: Evidence from food consumption in China

With increasing family income, the prevalence of overweight has risen and become a serious threat to individual health and a major public health challenge in China. This study attempts to shed light on the mechanism of income impact on the adult health outcomes of BMI and overweight through five potential channels: nutritional intakes, dietary diversity, dietary knowledge, food preference, and dining out. Using the panel data from the China Health and Nutrition Survey (CHNS), we investigate the causal relationship between income and health by considering the changes in the minimum wage as a valid instrument to address the endogeneity problem of income in health estimation. The results indicate that rising income increases the adults’ BMI and the propensity to be overweight; approximately 15.58% and 16.20% of income impact on BMI and overweight could be explained by the five channels considered, respectively. Among the five channels, dietary diversity plays the most significant role in explaining the income impact. We observe significant heterogeneity in income-BMI gradients across various income quantiles and subsamples. Specifically, income-BMI gradients tend to increase along with income percentiles, and income has a significantly positive impact on BMI and overweight for the male sample but it shows no significant impact for the female sample.

Do the rich pay their taxes early?

This paper examines the distributional effects of interest credits from early tax payments on average household income at the municipality level. The hypothesis that households from high-income municipalities pay their income taxes early is tested in a demand specification for interest credit for early tax payments. The empirical analysis considers regional data from 170 municipalities in the canton of Zurich from 2007 to 2013. The income elasticity of interest credit for early tax payments is estimated to be near unity for the top 5th percentile of average household income, whereas the same elasticity is below one-half for the lower 95th percentile and is statistically insignificant. The finding that high-income households pay their taxes early supports the view that the rich are not liquidity constrained. Early tax payments make the tax system more regressive for high-income households.

Late presentation of hepatitis B among patients with newly diagnosed hepatocellular carcinoma: a national cohort study

BackgroundRecently, the concept of “late presentation with viral hepatitis” was introduced to help quantify the proportion of patients missing timely diagnosis and treatment for viral hepatitis. The clinical implications of late presentation of hepatitis B at the population level, however, are largely unexplored.MethodsUsing newly-diagnosed hepatitis B related hepatocellular carcinoma (HCC) patients (N = 1276) from the Korean National Health Insurance Service-National Sample Cohort, a nationally representative cohort study was conducted between 2002 and 2013. HCC patients were classified into 3 groups: late presentation of hepatitis B (no prior clinic visits for hepatitis B before HCC diagnosis), irregular visits (irregular pattern of outpatient clinic visits), and regular visits (regular pattern of outpatient clinic visits).ResultsThe proportion of patients with late presentation decreased from 50.8% in 2003 to 23.1% in 2013. In multivariable analysis compared with patients in the regular visits group, patients with late presentation were more likely to be younger and to be in lower income percentiles. After adjusting for age, sex, year of HCC diagnosis, income percentile, and initial treatment, the hazard ratios (95% confidence intervals) for all-cause mortality comparing the late presentation and irregular visits groups to the regular visits group were 1.76 (1.42–2.18) and 1.31 (1.06–1.61), respectively.ConclusionTimely diagnosis and treatment for hepatitis B related HCC was suboptimal at the population level. More intensive strategies to minimize late presentation for hepatitis B are needed, with special attention to younger people and lower income levels.

An economic analysis of the progressivity of income taxes using a dynamic general equilibrium model

This paper explores the effect of the progressivity of income taxes on the distribution of income and consumption across households as well as the aggregate output in Korea. Using Korean administrative data on income and tax by income percentile,we find that the post-2012 progressivity of Korean income taxes is double the pre-2012 progressivity. By building a dynamic general equilibrium model with heterogeneous agents, we quantify the long-run effect of the increased progressivity of income taxes on Korean economy. We find that the more progressive income taxes increase the government's tax revenue, while reducing the dispersion in income and consumption across individuals. However, the bottom decile of the income distribution is the only group that experiences a rise in consumption, while the consumption of all other income deciles is reduced. This is attributed to the large decline in the aggregate capital. Faced with the increased tax burden, high income earners reduce their savings, causing the aggregate capital and thereby output to decrease.

Beyond Head of Household: Rethinking the Taxation of Single Parents

Under current law, unmarried taxpayers with children can take advantage of the head of household filing status (HHFS) to reduce their federal income taxes. We argue that the design of the filing status is largely obsolete, geared toward alleviating a “marriage penalty” in the tax code that is much less important than when the filing status was first established. At the same time, the growth in the fraction of Americans raising children outside of traditional two-parent households has dramatically raised the cost of the filing status to the fisc. In this article, we highlight two features of the design of HHFS that undermine its goal of providing support to single parent households. First, because it is designed as a filing status, HHFS provides a larger tax break to high-income taxpayers than to low-income ones: in 2013 HHFS saved qualifying taxpayers in the 25th percentile of the income distribution under $100 a year compared to almost $2,000 a year for qualifying taxpayer in the 75th income percentile. Second, the tax savings provided by HHFS bear no relation to the number of children a taxpayer supports, even though taxpayers supporting more children are likely to have less ability to pay. We propose reforming HHFS by replacing it with an expanded child tax credit for single parents and estimate that a revenue neutral reform along these lines would support a refundable tax credit of approximately $384 per child for households headed by single parents.

Inclusive Growth and Absolute Intragenerational Mobility in the United States, 1962-2014

This paper combines historical cross-sectional and longitudinal data in the US to study patterns of economic growth within the income distribution. We quantify absolute mobility as the fraction of families with higher income over a period of several years. The rates of absolute mobility over periods of two to four years are procyclical and are largely confined within 45%-55%. We also find that absolute mobility decreases with income. Individuals and families occupying the lower ranks of the income distribution have a higher probability of increasing their income over short time periods than those occupying higher ranks. This also occurs during periods of increasing inequality. Our findings stem from the importance of the changes in the composition of income percentiles. These changes are over and above mechanical labor market dynamics and life cycle effects. We offer a simplified model to mathematically describe these findings.

Why has Income Inequality in Germany Increased From 2002 to 2011? A Behavioral Microsimulation Decomposition

AbstractThis paper proposes a method to decompose changes in income inequality into the contributions of policy changes, wage rate changes, and population changes while considering labor supply reactions. Using data from the Socio‐Economic Panel (SOEP), this method is applied to decompose the increase in income inequality in Germany from 2002 to 2011, a period that saw tax reductions and a controversial overhaul of the transfer system. The simulations show that tax and transfer reforms have had an inequality‐reducing effect as measured by the mean log deviation and the Gini coefficient. For the Gini, these effects are offset by labor supply reactions. In contrast, policy changes explain part of the increase in the ratio between the 90th and the 50th income percentiles. Changes in wage rates have led to a decrease in income inequality. Thus, the increase in inequality was due to changes in the population.

Prenatal exposure to air pollution and intergenerational economic mobility: Evidence from U.S. county birth cohorts

New estimates reveal intergenerational economic mobility varies substantially across U.S. counties. The potential role of local environmental health exposures in structuring mobility outcomes has been thus far unexamined, despite mounting evidence that early life exposure to environmental pollutants has lasting impacts for individual human capital development and labor market performance. This study aims to fill this gap by estimating the impact of exposure to air pollution in the birth year on the average intergenerational mobility outcomes of children from low-income families as measured in adulthood. We do so by linking measures of intergenerational economic mobility for U.S. county-cohorts born between 1980 and 1986 to the county average concentration of total suspended particulates (TSP) in the birth year. We then estimate multivariate linear regression models that adjust for birth-cohort fixed effects, county-fixed effects and time-varying county-level covariates to address potential confounding. We find higher levels of TSP in birth year is associated with less upward economic mobility for children from low-income families: a one standard deviation increase in TSP levels is associated with a 0.14 point reduction in average income percentile ranking as measured in adulthood. Notably, we find no association for children from high income families. Our findings indicate early life exposure to air pollution may reduce the prospects children from low-income families will achieve upward economic mobility and suggest variation in environmental quality may help explain observed variation in mobility outcomes.

The Interaction of Borrower and Loan Characteristics in Predicting Risks of Subprime Automobile Loans

We utilize the data of a very large UK automobile loan firm to study the interaction of the characteristics of borrowers and loans in predicting the subsequent loan performance. Our broader findings confirm the earlier research on the issue of subprime auto loans. More importantly, unmarried borrowers living with furnished tenancy agreements who have relatively new jobs have a probability of defaulting of more than 60% compared to an average 7% default rate in overall subprime borrowers in the dataset. Also, in the above category are those who live in a less prosperous part of the UK such as the north-west, are full-time self-employed, have other large loan arrears, fall into the bottom 25% percentile of monthly income, secure loans with high loan to total value (LTV), purchase expensive automobiles with shorter loan duration payment plans, and have a high dependency on government support. This in fact is also true of those who go into arrears, except that the highest probability in this context is around 40% compared to 6% for an overall sample. These findings shall help in the understanding of subprime auto loans performance in relation to borrowers and loan features alongside helping auto finance firms improve predictive models and decision-making.

Does the New Rural Pension Scheme crowd out private transfers from children to parents? Empirical evidence from China

PurposeThe purpose of this paper is to examine the effect of New Rural Pension Scheme (NRPS) on the private transfer behavior of the non-co-resident adult children to their elderly parents in rural China, and hence address the income redistribution effectiveness of public program for the elderly in rural China.Design/methodology/approachPooled data from two waves of the China Health and Retirement Longitudinal Study and the combination of regression discontinuity design and difference in difference method are used to perform the analysis.FindingsNo evidence is found that pension payment from NRPS program does significantly crowd out the economic support from the adult children to their elder parents. The heterogeneous effects at different income percentile indicate that pension payment significantly increases the probability of receiving gross transfers and likelihood of the net transfer being positive for those elderly individuals with low income; in particular, the distinctive “family binding” arrangement may dramatically contribute to increasing the probability of receiving private transfers for the pension recipients.Originality/valueThe empirical findings would have far-reaching implications for the efficacy of public transfer or re-distributive programs such as NRPS; for the rural elderly, in particular, the unique “family binding” mechanism under the NRPS program may have positive welfare effects on the intended beneficiaries. Furthermore, an understanding of the inter-linkage between informal arrangements of elderly support and social re-distributive program provides further insight into the design of social security systems targeted to the vulnerable group in developing countries.