Net Beneficiaries Research Articles

Tax Competition, Income Differentials and Local Public Services

This paper examines strategic tax setting between fiscal authorities in the presence of mobile workers who locate across these jurisdictions in response to differing tax structures and congestable local public amenities. We find that the nature of the tax setting outcomes depend crucially on the proximity between cities. For “distant” cities with the same size populations, the pressure on tax rates of a more mobile workforce depends on the whether mobile workers are net beneficiaries or net contributors. If mobile workers are either high or low income earners, cities lower tax rates. If mobile workers are middle income earners, cities raise tax rates. For “close” or neighbouring cities, workers locate in one of the cities and tax rates and local public amenities are dispersed.

Unskilled Migration: A Burden or a Boon for the Welfare State?

As relatively low earners, migrants are net beneficiaries of the welfare state. Therefore, in a static setup, migration may be resisted by the entire native‐born population. However, it is shown that in a dynamic setup with a pension system, which is an important pillar of any welfare state, migration is beneficial to all income (high and low) and all age (old and young) groups, when the economy has good access to international capital markets. The pro‐migration feature of the dynamic model is weakened and possibly overturned when the economy does not have good access to such markets. In this case, to the extent that factor prices are significantly affected by migration because of low substitution between labour and capital, low‐skill native born and possibly also high‐skill native born may lose.

Migration and pension with international capital mobility

Being relatively low earners, migrants are net beneficiaries of the welfare state. Therefore, in a static set-up, migration may be resisted by the entire native-born population. However, it is shown that in a dynamic set-up, with a pension system (which is an important pillar of any welfare state) migration is beneficial to all income (high and low) and all age (old and young) groups.

Migration and pension.

"Migration has important implications for the financial soundness of the pension system.... While it is common sense to expect that young migrants, even if low-skilled, can help society pay the benefits to the currently elderly, it may nevertheless be reasonable to argue that these migrants would adversely affect current young since, after all, the migrants are net beneficiaries of the welfare state. In contrast to the adverse effects of low skilled migration in a static model, [the authors] show that in a Samuelsonian overlapping generations model...migration is a Pareto-improving measure. All the existing income (low and high) and age (young and old) groups living at the time of the migrant's arrival would be better off."

Pauline Hanson, the Mainstream, and Political Elites: The Place of Race in Australian Political Ideology

Pauline Hanson is well known for claiming that Australia's major political parties are out of touch with 'mainstream' Australia on issues related to race. Parallel surveys of the electorate and candidates in the 1996 federal election allow this claim to be tested, with items tapping general ideological dispositions, but including questions about Aboriginal Australians, immigration, and links with Asia. I make three critical findings: the electorate holds quite conservative opinions on these issues relative to the candidates, and is quite distant from ALP candidates in particular; attitudes on racial issues are a powerful component of the electorate's political ideology, so much so that any categorisation of Australian political ideology ignoring race must be considered incomplete; racial attitudes cut across other components of the electorate's ideology, placing all the parties under internal ideological strains, but the ALP appears particularly vulnerable on this score. The data show the coalition parties to be the net beneficiaries of the ideological tensions posed by race. Racial issues thus resemble a realigning ideological dimension, with possibly far-reaching consequences for the conduct of Australian electoral politics. Racism is as Australian as lamingtons and sausage rolls but the real political leader is the man or woman who can appeal to what Abraham Lincoln called 'the better angels of our nature'. Robert Hughes (Lamont 1996)

Banking Employment in the 1990s: Regional Effects of Consolidation

The effects of consolidation in the banking sector on employment are analyzed using data from the Federal Deposit Insurance Corporation's Statistics on Banking. Previous efficiency studies of consolidation find that there is no relationship between consolidation and non‐interest expenses (a proxy for employment). This study finds a negative relationship between consolidation and employment. It also finds no positive employment effects in states that were net beneficiaries of the savings and loan (S&L) bailout.

Regional Determinants of Small Firm Loans Under the U.K. Loan Guarantee Scheme

The Loan Guarantee Scheme was initiated in 1981 in order to alleviate a perceived constraint in the ability of small firms to secure bank finance due to a lack of collateral. This paper shows that a national small firms support scheme has, at the point of delivery, had quite different coverage across regions. Briefly, the initial evidence suggests that the Northern regions of England have been the major net beneficiaries of the scheme, primarily at the expense of Northern Ireland and Scotland. Further analysis identified house prices as the single most important determinant of loan size, acting via a collateral effect. On loan numbers and value, fixed regional effects were dominant particularly in the South East and North West.

Migration and Pension

Migrants, being relatively low earners, are net beneficiaries of the welfare state. However, this paper uses a dynamic model to show that because of migrants’ positive influence on the pension system, which is an important pillar of any welfare state, migration could be beneficial to all income (high and low) and age (old and young) groups.

Ending Universality: The Case of Child Benefits

The paper evaluates the 1993 child tax benefit reforms using the Social Policy Simulation Model and Database (SPSD/M) developed by Statistics Canada. The paper argues that few of the benefits of the reform went to the poorest families. Instead, because of the interaction of the tax and benefit system, the greatest net beneficiaries were lower-middle income families in the $40,000 to $50,000 income range. The paper also evaluates the effectiveness of the earned income supplement in increasing incentives to participate in the labour market. It argues that, because of tax back provisions, the earned income supplement results, on average, in an increase in marginal tax rates for Canadian families. Moreover, even when the earned income supplement decreases marginal tax rates, it will have only the most minimal effects on labour force participation.

COMPULSORY VOTING AND GOVERNMENT SPENDING

Crain and Leonard (1993) examine the effects of compulsory voting on the scale of government spending. The purpose of this comment is twofold. First, problems in the Grain and Leonard's approach are identified. The choice of government consumption, rather than expenditure, as representative of government spending is inappropriate and the classification of non‐voters as net beneficiaries of government spending is questionable. Second, the composition of government expenditure is examined. Cross‐country data tentatively suggests that voters benefit, relative to non‐voters, from government expenditures on defence and economic services while non‐voters benefit from government expenditure on health.

Has Power Shifted in the Grocery Channel?

Retailers have not gained profitability at the expense of manufacturers in the last two decades, according to accounting and stock market measures of profits, despite substantial industry restructuring and new forms of channel rivalry. Both manufacturers and retailers have experienced reductions in profitability. Consumers may be the net beneficiaries these and other changes. In this study we survey the recent evolution of the grocery channel, examine the connections between changes in channel structure, conduct, and performance, and assess whether profitability has shifted as a result. We relate these findings to the issue of whether power has shifted in the grocery channel.

User Fees for Health Care: Why a Bad Idea Keeps Coming Back (Or, What's Health Got to Do With It?)

ABSTRACTCalls for user fees in Canadian health care go back as far as the debate leading up to the establishment of Canada's national hospital insurance program in the late 1950s. Although the rationales have shifted around somewhat, some of the more consistent claims have been that user fees are necessary as a source of additional revenue for a badly underfunded system, that they are necessary to control runaway health care costs, and that they will deter unnecessary use (read abuse) of the system. But the real reasons that user fees have been such hardy survivors of the health policy wars, bear little relation to the claims commonly made for them. Their introduction in the financing of hospital or medical care in Canada would be to the benefit of a number of groups, and not just those one usually thinks of. We show that those who are healthy, and wealthy, would join health care providers (and possibly insurers) as net beneficiaries of a reintroduction of user fees for hospital and medical care in Canada. The flip side of this is that those who are indigent and ill will bear the brunt of the redistribution (for that is really what user fees are all about), and seniors feature prominently in those latter groups. Claims of other positive effects of user fees, such as reducing total health care costs, or improving appropriateness or accessibility, simply do not stand up in the face of the available evidence. In the final analysis, therefore, whether one is for or against user fees reduces to whether one is for or against the resulting income redistribution.

Food Marketing Technology and Contingency Market Valuation

AbstractMarketing activities are introduced into a rational expectations model of the food marketing system. The model is used to evaluate effects of alternative marketing technologies on the distribution of the benefits of contingency markets in agriculture. Benefits depend on two parameters: the cost share of farm inputs and the elasticity of substitution between farm and nonfarm inputs in food marketing. Over a broad spectrum of technologies, consumers are likely to be the net beneficiaries and farmers the net losers from the provision of contingency markets.

Ethnic issues and voting in the 1987 federal election

Abstract Although ethnic issues have had a higher profile in Australian politics in the 1980s, they still engender few party political differences among voters, showing that bipartisanship on immigration and multiculturalism remains important. However, a plurality of Australian voters now want an end to all immigration, a major change from twenty years ago. The patterns of ethnic voting which were observed in 1979 were maintained in the 1987 federal election, suggesting that the period between 1973 and 1979 represented a political fault‐line in ethnic voting in Australia. Overall, Labor is the net beneficiary from the ethnic vote; without support from Southern Europeans in the 1987 election, they would have trailed the Liberal‐National coalition by 2 per cent of the total vote.

Government revenue and expenditure in an agrarian economy: North Arcot District in South India

AbstractThis paper uses disaggregated data to assess the recent history and geography of revenue mobilization and expenditure allocation in a district where rice production increased by 50 per cent during the decade 1973–83 and where gross urban output (to judge from research in one market town) increased in real terms by a factor of 8. At the district level, land revenue is a small and unstable component of revenue despite the dynamism of the rice economy. Furthermore rice is exempt from commercial taxes, which are eight times more important than land revenue, just under half of which derives from traded agricultural goods. Despite the region's commercial dynamism, real revenue has increased by only 76 per cent over the decade, suggesting substantial evasion. The district appears to be a net donor to the state fisc. Direct expenditure shows urban bias (being 60 per cent more per caput than rural expenditure), though the gap has been narrowing. Despite this trend the rice‐producing sector appears to be a net beneficiary from direct revenue and expenditure. A rural micro‐level case study shows that the village panchayat is a net donor and the urban panchayat union a net recipient of an unstable quantum of revenue. A case study of an urban municipality shows real revenue declining over the decade, forcing an increasing dependence upon discretionary grants from the state government, which cannot prevent a deterioration in urban infrastructure. Indirect revenue and expenditure shows a recent trend towards the rural population. Public sector employment is numerically significant, urban, and has average incomes equal to the top decile of rural cultivators.