Lower Levels Of Income Inequality Research Articles

Lessons for Americans from Denmark about inequality and social mobility

Many progressive American policy analysts point to Denmark as a model welfare state with low levels of income inequality and high levels of income mobility across generations. It has in place many social policies now advocated for adoption in the U.S. Despite generous Danish social policies, family influence on important child outcomes in Denmark is about as strong as it is in the United States. More advantaged families are better able to access, utilize, and influence universally available programs. Purposive sorting by levels of family advantage create neighborhood effects. Powerful forces not easily mitigated by Danish-style welfare state programs operate in both countries.

Transforming Zones of Exclusion to Zones of Inclusion? Local-Level UN Peacekeeping Deployments and Educational Attainment

Abstract Higher educational attainment levels are associated with better public health outcomes, lower levels of income inequality, more participation in democratic instructions, and safer communities. Promoting education in war-torn societies can have an immediate impact in mitigating violence and play a significant role in preventing conflict recurrence. This study investigates UN peacekeeping missions’ role in this process, positing that UN deployments to locations experiencing armed conflict lead to higher levels of educational attainment by increasing local stability, incentivizing individuals to return to school while also making renewed investment worthwhile. Testing this logic using new data on local-level educational attainment across Africa from 2000 to 2014, this study finds that conflict zones where the UN maintained peacekeeping deployments saw an increase in educational attainment when compared to those that did not, a finding corroborated by coarsened exact matching. Maintaining a modest number of UN forces is shown to increase female attainment by at least 4.89 percent and reduce gender disparity by 5.13 percent, revealing the critical role UN peacekeeping plays in restoring education in the shadow of political violence.

The Political-Economic Correlates of Discursive Engagement in Europe

We examine the individual-level characteristics and political and economic conditions associated with political discussion. To build our model of discursive engagement, we draw on existing research on political participation as well as our own theoretical reasoning. Our data cover two million individuals in twenty-eight European countries over forty-five years, and we employ a little-used approach to multilevel analysis that distinguishes variations in engagement attributable to cross-country differences from those stemming from within-country changes. Our primary findings reveal that, within countries, citizens are more likely to talk about politics at election time, when there are more electorally competitive political parties, during periods of recession, when unionization levels are higher, and when racial and ethnic diversity is greater. Across countries, political discussion is more likely where elections are ongoing and in countries with lower levels of income inequality and corruption. We also find that men and the higher-educated are more likely to discuss politics, as are those who are middle aged or employed. Our approach is wide-ranging, but it is also deliberately correlational. Future observational and experimental studies might expand on and identify the causal underpinnings of the associations we establish here.

Clusterization of post-communist countries of the Central and Eastern Europe by income inequality level

Using level of income inequality, the clustering of post-communist countries of the Central and Eastern Europe is carried out by the following indicators: Gini index, share in the national income of the second quintile group, share in the national income of the third quintile group, share in the national income of the fourth quintile group, share in the national income of 10% of the poorest, share in the national income of 20% of the richest.,Сluster analysis (k-means method), in the programming environment Statistica is used as analysis tool and five clusters are obtained. The first cluster includes 8 countries (Albania, Hungary, Poland, Bosnia and Herzegovina, Czech Republic, Сroatia, Russia, Slovakia) is characterized by sufficiently low level of income inequality and can be explained by flow of foreign investment and business transnationalization contributing to the increase of incomes of the main population groups of these countries. The second cluster includes 4 countries (Belarus, Slovenia, Ukraine, Moldova) and is characterized by comparatively low level of income inequality, but high level of property inequality due to heredity, аccumulated wealth та concentration of physical and financial capital by so called «oligarchic clans». The third cluster includes 5 countries (Bulgaria, Montenegro, Macedonia, Romania, Serbia) and is characterized by medium level of income inequality. The fourth and fifth clusters include so called «Baltic tigers» (Latvia, Lihuania, Estonia) and is characterized by high level of income inequality as the result of the occurrence of «excess profits» of financial assets owners. In order to decrease the income inequality in the investigated countries, the following measures are proposed: for the countries of the first cluster to accelerate deconcentration of capital ownership by «spaying» (redemption) of privatized enterprises shares by all categories on preferential terms (so called «ESOP programs»); for the countries of the second cluster to implement progressive tax scale where the tax rate for different groups of population vary depending on the income received and citizens with the lowest incomes (at the level of subsistence minimum or minimum wage) do not pay individual taxes at all; for the countries of the third cluster to cope with «shadow» economy and informal unemployment; for the counties of the fourth and fifth clusters to decrease tax burden on private entrepreneurs and thus stimulate self-employment.

Tax reforms and income inequality in former Yugoslav countries: Escaping the avant-garde neoliberalism in the income tax policy

After the breakup of former Yugoslavia Croatia, Serbia and Slovenia followed different income tax reform trajectories that could explain currently different levels of income inequality in these countries. Our paper analyzes redistributive effects of introducing progressive tax systems, like the ones currently implemented in Slovenia and Croatia, in the Serbian context. Using microsimulation modeling and Survey on Income and Living Conditions data for 2017 our results suggest that implementation of both Croatian and Slovenian tax system would yield lower levels of income inequality and poverty if applied in Serbia. Slovenian system achieves larger decrease in inequality due to higher tax burden on the top incomes and brings significant increase in tax revenues. Croatian tax schedule achieves stronger decrease in poverty as more generous personal allowance exempt higher portions of low incomes from labour taxes.

Is financial integration driver of income inequality A panel co-integration analysis in Europe

Research on income inequality and finance has become an increasingly popular research area in the post-crisis period. Fully modified (FMOLS) and dynamic OLS (DOLS) co-integrated regression models are employed to empirically explore and estimate the long run co-integration vector for non-stationary panels between 2000 and 2016. The study finds that a NMS-11 with relatively lower integrated international financial flows experience lower levels of income inequality than older EU-15 members that have more integrated international financial flows. These countries experience greater levels of income inequality. Financial development generally leads to decreased income inequality in the whole sample and the NMS-11, whereas the results are mixed for the old EU-15 members. The study recommends government policies, especially in NMS-11 countries and European transition countries, that prioritise further financial market reforms (credit and stock markets) and greater financial freedom and minimise government interference that are vital to development of financial sector and thus economic growth.

Is financial integration driver of income inequality A panel co-integration analysis in Europe

Research on income inequality and finance has become an increasingly popular research area in the post-crisis period. Fully modified (FMOLS) and dynamic OLS (DOLS) co-integrated regression models are employed to empirically explore and estimate the long run co-integration vector for non-stationary panels between 2000 and 2016. The study finds that a NMS-11 with relatively lower integrated international financial flows experience lower levels of income inequality than older EU-15 members that have more integrated international financial flows. These countries experience greater levels of income inequality. Financial development generally leads to decreased income inequality in the whole sample and the NMS-11, whereas the results are mixed for the old EU-15 members. The study recommends government policies, especially in NMS-11 countries and European transition countries, that prioritise further financial market reforms (credit and stock markets) and greater financial freedom and minimise government interference that are vital to development of financial sector and thus economic growth.

Income inequality and child maltreatment risk during economic recession

While several studies have examined the link between economic downturns and child maltreatment, the evidence linking economic downturns to child maltreatment is not consistent and cannot be generalized to the U.S. as a whole. This study builds on prior literature by extending the investigation of this association to 48 of the 50 U.S. states using National Child Abuse and Neglect Data System (NCANDS) data on child maltreatment reports from 2004 to 2013. Since the effects of economic recessions are not equally distributed in society, this study also examines whether the association between macroeconomic recessions (measured using large-scale involuntary job losses) and child maltreatment reports differs by the level of income inequality in states. Using a fixed-effects regression approach, we find that involuntary job losses are associated with increased rates of physical abuse reports, but not reports of other types of child maltreatment. We also find that the effects on reports on physical abuse and other types of maltreatment are largest in states with relatively low levels of income inequality. This surprising finding may be explained by the worse prospects of reemployment in low-inequality states, where families may experience more stress and uncertainty related to job losses.

Export structures, income inequality and urban-rural divide in China

Recent literature has linked export upgrading to income inequality, and found that regions exporting more sophisticated products tend to have lower levels of income inequality. Here, we extend the literature by stressing that regional income inequality is shaped not only by export product structure but also by export destination structure. We further scale down our analysis to the intra-regional level, and examine urban-rural inequality within a region. Few have related urban-rural inequality to export upgrading and a region's export product/destination structures. Hence, we contribute to the current literature by examining how regional export product/destination structures have shaped income inequality in general and urban-rural inequality in particular. Based on China's export data and income survey data, we show that export upgrading only contributes to the reduction of income inequality in China's urban areas. Urban-rural inequality tends to be more severe in regions that have more complex export product/destination structures, due to the concentration of export activities in urban areas and to some barriers that inhibits the flow of input factors (e.g. capital and labor) between rural and urban areas.

Agglomeration of Manufacturing Industrial, Economic Growth, And Interregional Inequality in South Sumatra, Indonesia

Industrial agglomeration has become common discussion topic, particularly in relation to economic growth and the reduction of regional inequality between regions. The phenomenon that occurs at this time that the agglomeration of manufacturing industries in South Sumatra has not fully happened. However, the determination of South Sumatra province as one of the central regions of industrial growth reflects the high economic growth and low levels of income inequality are the effects of the agglomeration of manufacturing industry. The analysis technique used the simultaneous model with panel data interregional in South Sumatra with two-stage least square approach, during the period 2004-2014. The potential agglomeration of manufacturing industry is calculated using the Balassa index, while regional inequality calculated using Williamson index. The results showed that, (1) economic growth (G), income inequality (IW) and population (POP) exhibited significantly effect on agglomeration of manufacturing industry (IB); (2) agglomeration of manufacturing industry, population, per capita income (YCapt) and a per capita income of the previous year (YCapt−1) a significant effect on economic growth; and (3) economic growth (Gt), economic growth in the previous year (Gt−1) and agglomeration of manufacturing industry significant influence on income inequality.

Comparisons of utility inequality and income inequality

A simple theoretical model is developed and analyzed to investigate the possible relationships between income inequality and utility inequality. Measuring utility inequality and income inequality with Gini coefficients, it is argued that there need not be any relation whatsoever between the realized levels of inequality in these two distinct outcomes. That is, a high level of income inequality could result when there is either equally high or absolutely no utility inequality, and a low level of income inequality could result when there is either no utility inequality or a relatively high degree of utility inequality. Consequently, if what we are actually concerned with is inequality in utility or well-being, observations on income inequality might be meaningless.

Status Crystallization and Mobility Lock: The Poverty Production Process

While America is nominally the “land of opportunity”, it is more so for some than others. Those in the lowest and next-to-lowest class quintiles are especially disadvantaged. Numerous efforts to be helpful seem to have not worked well probably due to a lack of opportunities and misaligned interventions. For the most part, residents in these classes seem to be stuck in their positions. This paper hypothesizes that “status crystallization” in the bottom quintiles (low on income, low on wealth, low educational attainment, and manual/episodic low status work/job) creates a “quadruple helix” of intertwined deficits that can “lock” individuals and families in a poverty position. This “mobility lock” contributes to the persistence of poverty status in spite of numerous social programs and health services. These five variables—income, wealth, educational attainment, occupation type and health—are all forms of personal capital that contribute to the opportunities for social mobility in the United States. High values on these variables act as “compound interest”, accelerating mobility; low values function as the opposite—sort of the “payday loan”: effectively trapping those individuals in lower and ever decreasing status. However, as discussed in this article (and by others), personal capital alone does not sufficiently predict opportunities for social mobility in the United States. Social capital—or the networks of relationships that contribute to living and working in a given society—provide and enhance opportunities for social and economic mobility. As pointed out by Raj Chetty and others, the conditional probability of upward mobility is also enhanced by geographic location, or “opportunity areas”. Higher opportunity places shared qualities associated with upward mobility: good schools, greater levels of social cohesion, many two-parent families, low levels of income inequality and little residential segregation either by class or race (Gareth Cook, 2019, The Atlantic). Low values on these factors may tend to co-exist in some areas and become “impediment areas” as opposed to mobility enhancement ones.

Billionaires, Millionaires, Inequality, and Happiness

The relationship between inequality and happiness is counter-intuitive. This applies to both inequality in income and wealth distribution overall and also inequality at the very top of the wealth pyramid, as measured by billionaire intensity (the ratio of billionaire wealth to GDP). First, billionaire intensity appears to be higher in countries with low, not high, levels of income inequality. Second, happiness indices are higher in countries with high percentages of billionaire and millionaire wealth as a proportion of GDP, but with low levels of income inequality. This paper uses databases from the Forbes billionaires list, the Global Wealth Report (GWR), and the World Happiness Report, as well as from the World Database on Happiness. Using these datasets, I examine the relationship between income inequality and happiness for over 200 countries from 2000 to 2018. It turns out that in relatively poor countries – below $20,000-$30,000 per capita income – inequality raises happiness rather than lowers it, but inequality has a negative impact on happiness in rich countries. A certain degree of inequality of wealth and income distribution has a positive impact on happiness feelings, especially in countries with low levels of income. Furthermore, wealth inequalities, and especially the degree of concentration of wealth at the very top of the wealth pyramid, raise happiness self-evaluations even when income inequalities lower it.

Economic growth and the optimal inequality of income

Inequality of income is one of the significant factors forming social capital. Two views dominate among economists dealing with the influence of income inequality on economic growth. On the one hand, a too low level of income inequality does not motivate people to increase their labour productivity. Low inequality of income might result from an extended social care system and a GDP burdened with social transfers. A good example may be a situation when an unemployed person refuses to accept a job offer and prefers unemployment benefits to a slightly higher salary. Moreover, a lack of incentives for an employee who fails to acknowledge the economic sense of increasing the productivity of his or her work might lead to a slower growth of the economy.
 On the other hand, a contrary view suggests that an increase in inequality of income has a negative impact on the economy. The accumulation of wealth by a small number of citizens raises doubts about the good use of that wealth for the investments necessary for the growth of the economy. Excessive inequality of income is confronted with the disapproval of a significant part of society and is regarded as unfair and unjustified. It may also increase the crime rate, decrease trust and, more generally, lead to the weakening of social capital.
 The arguments presented above lead to the hypothesis that the influence of income inequality on the growth of the economy has a non-linear, parabolic character.
 We have confirmed this hypothesis in growth models of the US and Swedish economies. We assess the historically optimal inequality of income measured by the Gini coefficient at 46% and 24% for the US and Sweden, respectively. The optimal inequality of income for Poland was assessed previously at 29%. The dissimilarities may result from differences in culture, society, educational level and diligence.

How do sprawl and inequality affect well-being in American cities?

This study investigates whether income inequality is related to sprawl and wellbeing in American cities. The results do not provide evidence to support the role of income inequality as a mediator of the link between sprawl and well-being. Instead, the results tell a more nuanced story. Specifically, they indicate that consistent with a priori expectations, lower levels of sprawl are, on average, associated with lower levels of income inequality. Additionally, lower levels of sprawl correspond to higher levels of financial well-being. Supplementary investigation into this finding reveals that this disguises a very different experience among Metropolitan Statistical Areas (MSAs) with higher levels of financial wellbeing, in which lower sprawl corresponds more strongly to higher levels of financial well-being. While the evidence is not unimpeachable, these findings lend some support to conventional anti-sprawl urban planning wisdom for American cities.

Urban Climate Vulnerability in Cambodia: A Case Study in Koh Kong Province

This study investigates an urban climate vulnerability in Cambodia by constructing an index to compare three different communes, Smach Meanchey, Daun Tong, and Steong Veng, located in the Khemarak Phoumin district, Koh Kong province. It is found that Daun Tong commune is the most vulnerable location among the three communes, followed by Steong Veng. Besides, vulnerability as Expected Poverty (VEP) is used to measure the vulnerability to poverty, that is, the probability of a household income to fall below the poverty line, as it captures the impact of shocks can be conducted in the cross-sectional study. It applies two poverty thresholds: the national poverty line after taking into account the inflation rate and the international poverty line defined by the World Bank, to look into its sensitivity. By using the national poverty line, the study reveals that more than one-fourth of households are vulnerable to poverty, while the international poverty threshold shows that approximately one-third of households are in peril. With low levels of income inequality, households are not highly sensitive to poverty; however, both poverty thresholds point out that the current urban poor households are more vulnerable than non-poor families.

Determinants of External-Debt Crises. A Probit Model

The issue of EDC became increasingly important in the field of development economics primarily because EDC has been occurring more frequent after the deregulation of global financial flows in the 1970s (Tiruneh 2004, Jones 2015) hitting mostly MICs and LICs. Assessing the probability of an EDC to occur is especially important since recovery from an EDC imposes additional costs on the affected economies in tangible and non tangible terms. The main findings of my research boil up to the following conclusions. First, an increase in the level of inflation, share of short term debt in ED, net barter TOT, total debt service to GNI ratio, and share of income held by the richest 10% and share of agriculture in GDP leads to an increase in the probability of an EDC to occur. Second, an increase of are total reserves to ED ratio and the total debt service to GNI ratio leads to a decrease of the probability of an EDC to occur. Therefore, holding FX reserves is a strong protective measure from an EDC. Third, the share of income held by the richest 10% of the population is an especially strong determinant of EDC for the LMICs; while in the LICs the effect of this factor is opposite, meaning that LICs with low level of income inequality have higher risk of a debt distress. The probit model helps to predict the probability of the EDC to occur in any given country using the values of the determinants. (The abbreviations are clarified in the text.)

Linking Economic Complexity, Institutions, and Income Inequality

A country's mix of products predicts its subsequent pattern of diversification and economic growth. But does this product mix also predict income inequality? Here we combine methods from econometrics, network science, and economic complexity to show that countries exporting complex products (as measured by the Economic Complexity Index) have lower levels of income inequality than countries exporting simpler products. Using multivariate regression analysis, we show that economic complexity is a significant and negative predictor of income inequality and that this relationship is robust to controlling for aggregate measures of income, institutions, export concentration, and human capital. Moreover, we introduce a measure that associates a product to a level of income inequality equal to the average GINI of the countries exporting that product (weighted by the share the product represents in that country's export basket). We use this measure together with the network of related products (or product space) to illustrate how the development of new products is associated with changes in income inequality. These findings show that economic complexity captures information about an economy's level of development that is relevant to the ways an economy generates and distributes its income. Moreover, these findings suggest that a country's productive structure may limit its range of income inequality. Finally, we make our results available through an online resource that allows for its users to visualize the structural transformation of over 150 countries and their associated changes in income inequality between 1963 and 2008.

Volunteering and Income Inequality: Cross-National Relationships

Wilkinson and Pickett, in their 2009 book The Spirit Level, found that, in rich countries, income inequality was negatively associated with a range of indicators of well-being, but they did not consider the relationship with volunteering. This paper seeks to fill that gap. Using existing data sources, it shows that, among European countries, higher levels of volunteering are associated with lower levels of income inequality. The relationship is particularly strong for regular and sport-related volunteering. The basic Spirit Level thesis is therefore confirmed as applicable to volunteering. However, while the thesis involves just one theoretical explanation for the income inequality/well-being relationship, namely status anxiety, in the case of volunteering, other variables are also found to be at play, including government social spending, available leisure time and geo-historical traditions. It is concluded that, while high levels of volunteering, as a form of social capital, can be seen as one of a number of features of more equal societies, disentangling cause and effect may require a more holistic approach to understanding its contribution to the generation and sustaining of social well-being.

The SAGE encyclopedia of world poverty

The SAGE Encyclopedia of World Poverty, Second Edition addresses the persistence of poverty across the globe while updating and expanding the landmark first edition, originally published in 2006 prior to the economic calamities of 2008. For instance, while continued high rates of income inequality might be unsurprising in developing countries such as Mexico, the Organization of Economic Co-operation and Development (OECD) reported in May 2013 even countries with historically low levels of income inequality have experienced significant increases over the past decade, including Denmark, Sweden, and Germany. The UN and the World Bank also emphasize the persistent nature of the problem. It is not all bad news. In March 2013, the Guardian newspaper reported, Some of the poorest people in the world are becoming significantly less poor, according to a groundbreaking academic study which has taken a new approach to measuring deprivation. The report, by Oxford University's poverty and human development initiative, predicts that countries among the most impoverished in the world could see acute poverty eradicated within 20 years if they continue at present rates. On the other hand, the UN says environmental threats from climate change could push billions more into extreme poverty in coming decades. All of these points lead to the need for a revised, updated, and expanded edition of the Encyclopedia of World Poverty, Second Edition.