Income Redistribution Research Articles

Dynamic tax evasion and growth with heterogeneous agents

AbstractWe develop a tractable model economy in which public capital improves aggregate productivity, and the taxpayers have heterogeneous evasion opportunities. By issuing bonds, compliant taxpayers supply the evaders with an instrument to hedge against auditing risks, thereby expanding their evasion capacity. The wealth share of tax evaders relates negatively to the economy’s productivity but has a hump-shaped relationship with the growth rate of aggregate capital. The fiscal policy that maximizes welfare differs from the one that maximizes tax revenues because the latter does not account for the redistribution of wealth (and risk) between compliant and evasive taxpayers.

To Create or to Redistribute? That is the Question

Abstract This study delves into the persistent low GDP growth observed in the post-crisis period, despite aggressive financial easing measures. It explores how economic agents allocate available funds, either through investments in new capital creation or the acquisition of existing assets for capital gains (asset redistribution). The former approach bolsters total income and employment, while the latter reshapes wealth distribution among agents. Through a combination of theoretical insights and empirical evidence, we argue that during economic downturns, investors often find it more lucrative, and lenders consider it safer, to finance the repurchasing of existing assets rather than investing in new ones. This trend not only worsens recessions but also hampers the recovery process by limiting entrepreneurs’ access to funding and altering the economy’s capital structure. Moreover, given that asset redistribution tends to benefit the wealthy, a surge in inequality fosters a cycle of income redistribution, further exacerbating economic downturns.

Safety, Belonging and Success in Education for Refugees in Europe: A Systematic Review

ABSTRACTThis systematic review aims to explore refugees' educational access, experiences and outcomes in Europe since 2015. The review follows a systematic process of reviewing and synthesising texts compiled in the Hub for Education for Refugees in Europe (HERE) Knowledge Base to fill gaps in knowledge about the educational trajectories of learners of refugee and forced migrant backgrounds who have arrived in Europe. The review includes studies that focus on all forms of educational provision and services for refugees and forced migrants in Europe: formal, non‐formal and informal. The review also takes a meta‐ethnographic approach to data analysis and synthesis. Key findings highlight the interconnectedness of safety, belonging and success in education for learners with refugee and forced migrant backgrounds and the necessity of economic redistribution, cultural recognition and political participation for achieving these goals.

A Comparative Analysis on Ecological Footprint of Consumption and Import in Premature Deindustrialized Countries

This study aims to analyze the factors influencing the ecological footprint of consumption and import as indicators of environmental degradation in premature deindustrialized countries. Using advanced Method of Moments Quantile Regression (MMQR) analysis, we examined a panel of 27 countries from 1991 to 2021. The main findings indicate that income, income inequality, and industrialization are positively correlated with the ecological footprint stemming from consumption, but an increase in the share of renewable energy consumption exhibits a mitigation effect. The ecological footprint stemming from imports, on the other hand, is exacerbated by income, industrialization, de facto trade globalization, and democracy, whereas it is negatively affected by the higher share of renewable energy consumption. Importantly, MMQR analysis reveals that the effect of each independent variable is non-linear, with the magnitude of coefficients varying across different quantiles of the ecological footprint of both consumption and import. From a policy standpoint, effective mitigation of different aspects of environmental degradation requires prioritization of income redistribution, the promotion of green industrialization, and the enhancement of renewable energy adoption, as well as careful management of trade globalization and democratic governance in premature deindustrialized countries.

Impact of family values & upbringing on sibling relationships: Moderating role of wealth inheritance

ABSTRACT Indian culture is characterized by strong family values and deep familial relationships. Sibling relationships are highly valued and play a significant role in shaping the lives of individuals in Indian families. However, this relationship can be affected by improperly transferring family wealth or differences in opinion about wealth, family values, and upbringing. Sibling relations are responsible for the emotional influence of unexpected wealth . Generational transfer of wealth has been a ritual since ancient times and has gained academic consideration due to its economic implications on family wealth and the economy. This study aims to discover the extent to which Wealth Inheritance moderates the association between Family Values & Upbringing and the factors of sibling relationships (like Alliance, Care & Affection, Antagonism, and Companionship). 350 Participants from North India (opposite gender sibling/s and inherited wealth) were identified using a cross-sectional online survey design. They were assessed for various factors such as demography, Family Values & Upbringing, Sibling Relationships and Satisfaction with Wealth Inheritance. Subsequently, Structural Equation Modelling (SEM) was employed to extract the factors and test the hypothesized associations. Further, moderation analysis was conducted to test the moderating influence of Satisfaction with Wealth Inheritance on the association between Family Values and Upbringing with Sibling Relationships. Family Values and Upbringing parameter has a positive and significant relationship with all the sibling relationship factors, i.e. Alliance, Care & Affection. Wealth Inheritance has an appreciable impact on the association of Values and Upbringing in Sibling Relationships.

Development of employee financial participation schemes in EU member states and their impact on firm performance: new evidence using European Company Surveys

ABSTRACT Employee Financial Participation (EFP) in the form of Profit Sharing (PS) and Employee Share Ownership (ESO) are now widespread in European countries. EFP is expected to have a positive effect on the employees’ engagement with, and commitment to, their firm which may result in higher productivity and better firm performance. It may also advance other public policy objectives such as employment, economic democracy and improved income redistribution. The paper focuses on two aspects: firstly, the spread of EFP schemes across European companies in the last 20 years; and secondly, the impact of EFP on the performance of firms expressed in terms of productivity and employment. We show that, firstly, the number of companies offering EFP schemes to their employees, the proportion of employees to whom EFP schemes are offered, and the proportion of employees that have taken up the offer has all increased in the majority of EU countries. Secondly, under all conditions and in all EU countries, the presence of EFP schemes increases the likelihood of a company exhibiting improvement in both labour productivity and employment. This is an important conclusion and explains the recent interest in EFP by the European Parliament and the European Commission.

The Contribution of Islamic Education in Economic and National Development in the Digital Era

Islamic education has a very significant role in encouraging economic development and strengthening the nation's character in the digital era. This research underscores the importance of integrating moral values such as honesty, justice and responsibility in the Islamic education curriculum to produce individuals who not only have extensive knowledge but are also based on high morality. Islamic economic principles, such as zakat and infaq, act as effective tools for wealth redistribution, which contribute to reducing social inequality and improving people's well-being. Apart from that, Islamic education that is adaptive to technological developments encourages innovation that supports the digital economy and the development of the halal industry. Therefore, Islamic education not only makes a significant contribution to spiritual and moral aspects, but also plays an important role in economic progress and sustainable national development.

Akuntansi Syariah dan Pengentasan Kemiskinan dalam Menciptakan Kesetaraan Sosial di Indonesia

Islamic accounting has developed as a financial method aimed at promoting social justice and people's well-being in addition to making profit. Islamic accounting has a strategic role in reducing poverty and creating social equality in Indonesia, which is the world's largest Muslim population. The study analyzed how the application of islamic accounting based on principles such as transparency, justice, and social responsibility could help reduce poverty rates in Indonesia. Through literature and secondary data analysis, the study found that islamic accounting, mainly by instruments such as zakat, wakaf, and qardhul hasan, could provide financial solutions that support poor people's economic empowerment. Islamic accounting not only serves as a accounting system, but also as a tool to help strengthen the redistribution of wealth and build an inclusive economy.

How social and environmental investments attract and repel foreign investors: Insights on shareholder and stakeholder engagement

AbstractThis study investigates the diversifying impact of social and environmental investment (SEI) to attract and repel foreign investors (FIs) while determining to invest in environmental friendly firms. By analyzing SEI strategies within the Chinese context and employing panel data regression analysis, this study reveals numerous major insights. First, firms implementing average SEI strategies tend to attract greater investments from FI. On the other hand, above average SEI do not yield similar benefits, indicating that over‐investments in social and environmental projects could repel potential investors, and result in a transfer of wealth from shareholders to stakeholders. Furthermore, the present study reveals that firm performance strengthens the positive association between average SEI and FI. Finally, this study finds that the negative relationship between above‐average SEI and FI is intensified when firm performance is considered as a moderating factor. These insights are crucial for policymakers in formulating strategies to enhance foreign investments.

“They Never Had a Chance”: Unequal Opportunities and Fair Redistributions

Abstract A meritocratic fairness ideal typically asserts that income inequality is justifiable if it arises from differences in performance rather than mere luck. In this study, we present experimental evidence that reveals how merit judgments are influenced by the sources of performance differentials, while holding fixed the underlying impact on incentives to perform. Drawing inspiration from real-world factors that create inequality, we investigate unequal opportunities in education and employment that impact performance. Contrary to some earlier findings suggesting that merit judgments are unaffected by unequal circumstances, our study demonstrates that individuals’ redistributive behaviour is responsive to both the nature and extent of these unequal opportunities. This research thus provides fresh insights into the nuanced factors that motivate people to endorse income redistribution.

Movables as collateral and corporate credit: Loan-level evidence from legal reforms across Europe

Does pledging movables as collateral alter corporate borrowing? To answer this question, we study the effect of collateral law reforms on syndicated bank loans granted across nine European countries that facilitated pledging movables between 1995 and 2019, comparing them to 19 countries that did not. We differentiate firms in sectors of higher versus lower asset movability to strengthen the identification. We find that although the reforms have enabled firms in movable-intensive sectors to issue more secured loans, the average cost of the loans and the number of covenants have also increased. Channel tests suggest that banks may demand more to compensate for the potential wealth redistribution induced by newly issued secured credit, or the unique risk involved with using movables as collateral.

Main channels and consequences of the influence of war on educational inequality in society

A new, difficult and tragic research page is opening in domestic sociology – a detailed study of the effects of the Russian-Ukrainian war on all spheres of life of Ukrainian society, its social structure, institutional transformations, economic capabilities, political organization, as well as the daily life of citizens. An integral component of both the institutional structure of society and the everyday life of citizens is the sphere of education with its inherent and constantly reproduced educational inequality. A large-scale war has the potential to quickly and for a long period of time disrupt social order and change established patterns of social inequality in society, particularly in education, unevenly distributing stratified negative effects. With the beginning of large-scale hostilities, the educational infrastructure of Ukraine has suffered almost the greatest destruction since the Second World War. Schools and preschool education institutions have suffered the greatest damage and destruction. A large number of families with their children have been forced to move internally or externally, thus temporarily interrupting the opportunities for children’s education. The article summarizes the results of research in various countries that have experienced short or long-term periods of international or civil wars, which made it possible to identify the main channels of the war’s impact on educational inequality and the corresponding short- and long-term effects of the war. Seven main direct and indirect channels of the war’s impact on educational inequality have been identified, including the destruction of educational infrastructure; lack of teachers due to internal and external displacement, recruitment into the army or death; reduction of state expenditures on education; movement of a large number of adults and children; redistribution of power and wealth in society; the growth of poverty, the reassessment and change of priorities regarding education within the family; deterioration of children’s physical and mental health, malnutrition, stress, trauma, feeling of insecurity. Short- and longterm effects on the educational achievements of children are formed through channels of influence, which take the form of stratified educational losses, a decrease in family expenditures on education, as well as losses in the future lifetime income of individuals.

INNOVATING URBAN CHINA: The Rise of the Local Venture State and the Making of New Entrepreneurial Spaces

AbstractIn this article we centralize the analytic of the local venture state (LVS) to offer a novel framework for investigating China's new urban entrepreneurialism, which emerged after the 2008 global financial crisis. As a spatiotemporally specific response to the crisis, the LVS goes beyond GDP‐driven developmentalism, seeking to simultaneously promote economic development, indigenous innovation and social equity using a variety of financialized policy instruments. Ethnographic case studies of new entrepreneurial spaces in Beijing's Zhongguancun area situate the LVS at the interface between Zhongguancun's urban space and China's innovation system. They reveal the rationalities behind the rise of the LVS and discrepancies among policy intentions, the implementation thereof and actual local results. Underlying the mixed results of the LVS, we argue, is the complicated power dynamics within the LVS and a fundamental contradiction between the dynamics of technological innovation and those of wealth redistribution. In our examination of China's LVS vis‐à‐vis global struggles to tackle the protracted economic crisis and achieve a more socially inclusive model of urban development, we stress the need to theorize urban entrepreneurialism from the global East with the aim of enriching the literature of urban China and of variegated urban entrepreneurialism.

The Medico-Legal Approach to the Assessment of Testamentary Capacity: A Systematic Review

An increase in will challenges on the grounds of lack of capacity and undue influence is anticipated in the face of an imminent transfer of generational wealth by a growing elderly population with a high prevalence of cognitive impairment. Medical experts will be a necessary element of litigation to help the courts make the best legal determinations involving cognitive and psychiatric functions that may affect mental capacity and vulnerability to influence. We conducted the first systematic literature review using Preferred Reporting Items for Systematic Reviews and Meta-Analyses (“PRISMA”) guidelines in order to identify articles that addressed a comprehensive medico-legal approach to the assessment of testamentary capacity. Only 12 articles met the criteria for the systematic review. Banks v Goodfellow (“Banks”) continues to be considered the leading case that defines the criteria for the courts and lawyers in the determination of testamentary capacity. However, quantitative data to support this impression is nowhere to be found. Moreover, unpredictability remains a hallmark of cases involving will challenges. Since calls for increased medico-legal collaboration and updates to the Banks test have not been evaluated, a scoping review of a large number of judicial decisions is required to better understand the current approach to this legal determination. Relevant variables could be used to develop a predictive model that would help lawyers and medical experts in this important societal collaboration.

The Effects of Taxes on Income Distribution Justice

One of the most important economic problems that countries have faced from the past to the present is income inequality. Income distribution is an important indicator that allows us to understand the social and political structures of societies by revealing how the income gap between the rich and the poor in a country changes. Thus, income redistribution or income justice is one of the important goals of fiscal policy. Taxes are also important intervention tools that economic management has in achieving this goal. In this context, this study aims to examine the relationships between different types of taxes and income distribution in the Turkish economy during the period from 2002 to 2022 by using markov regime switching analysis method. The analysis results indicate that, during the period covered by the study, indirect taxes have a positive effect on income distribution, while taxes based on declaration have a detrimental effect on income distribution.

Monetary Policy and Its Impact on Income Distribution in Iraq for the Period 2003-2022

The problem of inequality in the distribution of income is one of the important economic variables that have been focused on in economic studies and research, and the study and analysis of the impact of economic variables in the redistribution of income is of great importance, whether in developed or developing economies, as justice in income redistribution can have important economic effects. This study goes to estimate the impact of some monetary indicators on income distribution in Iraq for the period 2003-2022, where this impact was estimated using the Joint integration according to the self-regression model of distributed slowdown (ARDL) and bound test the results of the test confirmed the existence of a significant impact of the monetary policy indicators represented by the exchange rate, the broad money supply and the interest rate in the redistribution of income in Iraq.

Moving money to support social justice movements: A spiritual practice.

Wealth inequality is rising, and millennials will be the future recipients of the largest intergenerational wealth transfer. Meanwhile, there is a need to move more money to support transformative social justice movements. This study examines the impact of spirituality as a motivator for the social justice movement giving among progressive young adult activists with wealth and class privilege, organizing toward the equitable redistribution of wealth, land, and power. Using survey data (n = 560), regressions and mediation models suggest that spiritual motivation was a significant positive predictor of how much participants monetarily gave to social justice movements. While religion did not significantly predict movement giving, indirect effects models showed that spirituality positively mediated the effect of being raised with any religion on movement giving compared to those indicating no religion. Implications are explored for how transformative organizing models draw upon secular spiritual practices in their pursuit of individual and collective change.

The moderating role of government heuristics in public preferences for redistribution

A theory of rational attitude formation suggests public perceptions that income differences are too large should lead to demands for income redistribution. Public opinion scientists irregularly observe this at best. It is possible that the instruments we use to observe support for income redistribution are ineffective. We suggest at least part of the inconsistently observed linkages are due to unobserved confounding of government heuristics. We hypothesize that government affect provides a heuristic cue for survey respondents to answer questions on their preference for the government engaging in income redistribution. The greater the valence or quantity of reasons for a survey respondent to have negative government affect, the more perceptions of inequality and support for redistribution are decoupled and apparently inconsistent. To test this, we measured government affect at the country-time level using trust, corruption perceptions, and economic performance. We executed tests of moderation using slopes-as-outcomes regressions with ISSP data from 36 countries in 102 country-time points. Given the difficulty in fitting complex theories of society and politics into a limited number of macro-comparative cases, we ran a multiverse analysis of alternatively plausible models. There is a consistent negative moderation effect across models suggesting that our theory of government affect as opinion expression on a survey is worthy of further consideration. The findings also suggest more qualitative cognitive survey interviews to better understand this process.

A curse on leisure? Resource rents and labor supply

An extensive literature establishes the resource curse, the paradoxical tendency of societies with more natural resources to have worse economic outcomes. Our formal model extends the resource curse literature in several ways. First, there may exist a general tendency for resources to crowd out private production while still increasing consumption and welfare. We establish this relation without assuming increasing returns to scale in the productive private sector, as is common in the literature. We also propose a novel resource curse to leisure time. Just as resources ‘should’ increase income – their failure to do so establishing the traditional curse – they should also allow more leisure. Recent cross-country data suggest the opposite is true. We offer initial steps toward explaining the discrepancy: resources can turn from blessing to curse on both leisure and income under flawed institutions, particularly when policymakers favor employment over leisure. Direct (re)distribution of resource wealth rather than expanded government employment presents a policy solution.

A Policy Proposal to Strengthen the Income Redistribution Function of the National Pension Scheme in South Korea: An Analysis of South Korea’s 5th National Pension Comprehensive Plan (Draft)

In this study, we elucidate the income redistribution effects of the proposal to incorporate the Bend Points mechanism of the U.S. OASDI into the Korean National Pension Scheme (BP-KNPS Proposal) through a micro-simulation analysis using individual data from the Korean Labor and Income Panel Study (KLIPS). In addition to examining the effects of introducing the BP-KNPS Proposal into the current National Pension Scheme (NPS), we also consider the impact of this scheme being combined with the 5th National Pension Comprehensive Plan (Draft), announced by Korea’s Ministry of Health and Welfare on 30 October 2023. When the BP-KNPS Proposal is introduced into the current NPS, the Mean Log Deviation (MLD) of the net transfer amount (lifetime pension benefits minus lifetime pension contributions) for regular employees decreases from 0.2022863 to 0.1929960. Similarly, the MLD for self-employed and irregular workers decreases from 0.2046127 to 0.1721433, indicating a reduction in income inequality. Furthermore, when the BP-KNPS Proposal is combined with the 5th National Pension Comprehensive Plan (Draft), the effects are mixed. The proposals to increase the pension contribution rate and adjust the rate increase speed via generation lead to a reduction in income inequality compared to the current NPS when combined with the BP-KNPS Proposal. However, the proposals to raise the pensionable age result in increased income inequality, similar to the outcomes under the current system. This finding suggests that the triple burden identified by literature review—the reduction in benefits due to disparities in contribution periods and life expectancy, and the raised pensionable age—has a greater impact on low-income participants than the inequality-reducing effects of the BP-KNPS Proposal.