Lower End Of Income Distribution Research Articles

Income polarization in the USA: What happened to the middle class in the last few decades?

With increasing income inequality in the US over the last few decades, what has happened to the middle class? The aggregate inequality indexes don't answer this question. We employ Relative Distribution tools and use the ASEC-CPS dataset in order to provide an analysis of the US income distribution and trace the impact of inequality on the middle class. We observe confirming the Pew study of 2016a typical polarization profile has emerged during 1998–2018 with a shift of many middle class families towards the lower end of income distribution. The hypothesis of the hollowing out of the middle class in the US starting with the age of Reaganomics is also confirmed. We also find some preliminary evidence for intersectionality, i.e. race, class and gender working together in a vicious cycle for the disadvantaged. Policies to counteract these tendencies must be anti-polarization policies along with those of relatively more egalitarian growth.

The Fall in German Unemployment: A Flow Analysis

In this paper we investigate the recent fall in unemployment, and the rise in part-time work, labour market participation, inequality and welfare in Germany. Unemployment fell because the Hartz IV reform induced a large fraction of the long-term unemployed to deregister as jobseekers and appear as non-participants. Yet, labour force participation increased because many unregistered-unemployed workers ended up accepting low-paid part-time work that was offered in quantity in absence of a universal minimum wage. A large part of the rise in part-time work was also due to the tax benefits Hartz II introduced to take up a mini-job as secondary employment. This has provided an easy way to top-up labour income staggering under the pressure of wage moderation. The rise in part-time work led to an increase in inequality at the lower end of income distribution. Overall we find that Germany increased welfare as unemployment fell.

Adoption of modern weaving technology in the handloom micro-enterprises in Assam: A Double Hurdle approach

Technological uplift is imperative for enterprises to achieve and sustain competitiveness in terms of both cost and quality of products. While the literature on technology adoption is voluminous, studies focused on adoption related issues concerning rural, nonfarm, and informal micro-entrepreneurs in developing economies are few and far between. In view of significance of these enterprises in employment and income generation at the lower end of income distribution in developing countries, a study of factors influencing adoption of modern technology in such enterprises assumes importance. Using firm-level data collected through a primary survey, the present paper analyses the determinants of adoption and extent of deployment of weaving technologies in the handloom micro-enterprises in rural areas of Assam. The results of the Cragg's Double Hurdle model reveal the significance of financial inclusion, availability of family labor, and social network on adoption and extent of deployment of weaving technologies. The presence of proper market linkages also appears to be crucial for adoption and use of such technologies in the rural areas. The study urges for a comprehensive policy framework to tackle the existing bottlenecks related to access to credit/capital, market linkages, and extension services to promote the technology adoption among the rural micro-entrepreneurs.

THE MOTIVES OF INTERGENERATIONAL TRANSFER TO THE ELDERLY PARENTS IN CHINA: CONSEQUENCES OF HIGH MEDICAL EXPENDITURE

The support for the elderly is facing big challenges with the problem of population aging. Transfers from adult children could partly insure elderly parents against low income and high medical expenditure. There are two main motives for transfers in the literature, namely altruism and exchange. By using data from a new household survey of people aged 45 years and above in China, we estimate the transfer derivatives with the adjustment of medical expenditure in elderly parents' income. We find a large negative impact of adjusted income on transfers at the lower end of income distribution, which is consistent with the altruistic motive. Evidence on the exchange motive is found only for sons, but not for daughters. In addition, there is evidence on the 'exchange-for-service' motive, which interprets transfer as a payment to parents' family services, such as taking care of grandchildren.

Retreat from Equality or Advance towards Efficiency? Land Markets and Inequality in Rural Zhejiang

AbstractBased on a 2001 survey, this study finds increased disparities in land distribution in rural Zhejiang. Regression analyses yield three main findings. First, increased disparities in land distribution are associated with growth of land markets. Second, rural households who acquired land through markets significantly increased their farm income. Land markets thus gave rise to a new venue of income generation and increased inequality in farm income. Widening disparities in land rights and farm income, however, did not constitute a further retreat from equality, but instead had compensatory effects on overall inequality, as land markets brought up families who would have fallen at the lower end of income distribution in the absence of such markets. Third, land markets increased efficiency in farming, as households who acquired land were using it more productively. In rural Zhejiang, growth of land markets broadened access to market opportunities and enhanced both efficiency and equity.

Trends in Absolute Poverty in Pakistan: 1990-91 and 2001

Poverty, defined comprehensively as absence of options to shape one’s life according to one’s own preferences, comes closer to the concept of human development as presented in UNDP’s Human Development Reports. Absolute poverty, on the contrary, defines poverty in terms of satisfaction of minimum physical needs of food and non-food items to enable people at the lower end of income distribution to engage in economic activity. From the vantage point of the policy-maker concerned with alleviation of poverty, it is crucial to know the magnitude of the existing level of poverty and identify the policy determinants of poverty as well as constraints standing in the way of an effective attack on the worst forms of absolute poverty. In Pakistan, like many other developing countries, poverty has emerged as a core issue on the policy agenda. The traditional measures of poverty—headcount, severity and poverty gap indicate that the incidence of poverty during the previous decade have shown no sign of poverty abatement despite numerous policy and institutional initiatives undertaken by the government. The debate on trends in poverty during the 1990s—an era of stabilisation and structural adjustment has been wide-ranging in Pakistan. However, there is no consensus on the poverty outcomes from the policy and institutional reforms. Primarily due to non-availability of basic data, the last year for which poverty estimates are available is 1998-99.