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Full-Text Articles in Economics
Large Devaluations And Inflation Inequality: Evidence From Brazil, Raphael Rocha Gouvea
Large Devaluations And Inflation Inequality: Evidence From Brazil, Raphael Rocha Gouvea
Economics Department Working Paper Series
In the aftermath of large devaluations, prices of tradable goods and lower-priced varieties increase significantly more than the prices of nontradables and higher-priced varieties. These relative price changes may lead to inflation inequality when household consumption baskets are different across the distribution of income. Using Cravino and Levchenko [2017]’s methodology, we show that inflation for poor households in Brazil was at least 11 percentage points higher than for rich ones in the aftermath of the 2002 large devaluation. A detailed case study of the City of São Paulo estimates an inflation inequality ranging from 8 to 11 percentage points in …
Labor Market Reform And Wage Inequality In Korea, Hyeon-Kyeong Kim, Peter Skott
Labor Market Reform And Wage Inequality In Korea, Hyeon-Kyeong Kim, Peter Skott
Economics Department Working Paper Series
Temporary workers make up a sizeable part of the labor force in many countries and typically receive wages that are significantly lower than their permanent counterparts. This paper uses an efficiency wage model to explain the wage gap between temporary and permanent workers. High-performing temporary workers may gain promotion to permanent status, and a high wage to permanent workers therefore serves a dual purpose: it affects the effort of both permanent and temporary workers. Applying the model to the Korean experience, we discuss the effects of the labor market reforms in 1998 on inequality.
Power, Luck And Ideology In A Model Of Executive Pay, Peter Skott, Frederick Guy
Power, Luck And Ideology In A Model Of Executive Pay, Peter Skott, Frederick Guy
Economics Department Working Paper Series
The microprocessor and related technologies have transformed corporate and industry structure; applied in a neo‐liberal environment, the technologies have had profound effects on the relative power of different groups. Skott and Guy (2007) and Guy and Skott (2008) formalized one aspect of this process of power‐biased technical change: firms' increased ability to monitor low‐paid employees and the resulting changes in inequality and employment at the low end of the income distribution. This paper addresses power biases and income inequality at the high end. Increasing firm‐level financial volatility has intensified the agency problem and increased the power of corporate executives. These …
Erasing Class/ (Re)Creating Ethnicity: Jobs, Politics, Accumulation And Identity In Kenya, Mwangi Wa Githinji
Erasing Class/ (Re)Creating Ethnicity: Jobs, Politics, Accumulation And Identity In Kenya, Mwangi Wa Githinji
Economics Department Working Paper Series
A large literature on African economies argues that ethnicity plays a role in the politics and economics of African countries. Unfortunately, much of this literature is speculative or anecdotal because of the lack of data, with the exception of a few papers that examine ethnic networking as a business or employment strategy. In many ways Africa’s failure to develop is a failure of nationhood. Creating nation is handicapped by the use of ethnicity. In this paper, I empirically examine the relationship between employment, wages and ethnicity in Africa via a case study of Kenya. I challenge the pervasive view that …
Labor Heterogeneity, Inequality And Institutional Change, Peter Skott
Labor Heterogeneity, Inequality And Institutional Change, Peter Skott
Economics Department Working Paper Series
US earnings inequality has increased dramatically since the 1970s, and the prospect of a reversal depends on what caused the trend. The standard explanation emphasizes skill-biased technical change. This paper briefly considers some aggregation issues and then proceeds to outline two alternative perspectives .power biased technical change and the effects of induced mismatch in the labor market .and their implications.
Information And Communications Technologies, Coordination And Control, And The Distribution Of Income, Frederick Guy, Peter Skott
Information And Communications Technologies, Coordination And Control, And The Distribution Of Income, Frederick Guy, Peter Skott
Economics Department Working Paper Series
We consider the links between information and communications technologies (ICTs) and the distribution of income, as mediated by problems of coordination and control within organizations. In the large corporations of the mid-twentieth century, a highly developed division of labor was coordinated and controlled with the aid of relatively underdeveloped ICTs. This created a situation in which the options of top management were constrained while the individual and collective power of lower paid workers was enhanced. Only in the late twentieth century, when the microprocessor and related technologies transformed the information systems of organizations, did improvements in the tools of coordination …
Power, Productivity And Profits, Frederick Guy, Peter Skott
Power, Productivity And Profits, Frederick Guy, Peter Skott
Economics Department Working Paper Series
New information and communication technologies, we argue, have been .power- biased.: in many industries they have allowed firms to monitor workers more closely, thus reducing the power of these workers. An efficiency wage model shows that .power- biased technical change’ in this sense may generate rising inequality accompanied by an increase in both unemployment and work intensity.
Relative Advantage, Queue Jumping, And Welfare Maximizing Weath Distribution, Alex Coram, Lyle Noakes
Relative Advantage, Queue Jumping, And Welfare Maximizing Weath Distribution, Alex Coram, Lyle Noakes
Economics Department Working Paper Series
Suppose individuals get utilities from the total amount of wealth they hold and from their wealth relative to those immediately below them. This paper studies the distribution of wealth that maximizes an additive welfare function made up of these utilities. It interprets wealth distribution in a control theory framework to show that the welfare maximizing distribution may have unexpected properties. In some circumstances it requires that inequality be maximized at the poorest and richest ends of the distribution. In other circumstances it requires that all wealth be given to a single individual.
The Second Paycheck To Keep Up With The Joneses: Relative Income Concerns And Labor Market Decisions Of Married Women, Yongjin Park
The Second Paycheck To Keep Up With The Joneses: Relative Income Concerns And Labor Market Decisions Of Married Women, Yongjin Park
Economics Department Working Paper Series
This paper investigates whether one’s effort to keep up with the Joneses has any effect on labor supply behavior. We provide a simple model and empirical evidence that labor supply decisions of married women are influenced by relative as well as absolute income of their husbands. We find, after controlling for husbands’ absolute income and other individual characteristics, that married women are more likely to be in labor force when their husbands’ relative income is low. Results are robust across various settings and measures of relative income and the size of the effect is economically meaningful. We also show that …
Emulation, Inequality, And Work Hours: Was Thorsten Veblen Right?, Samuel Bowles, Yongjin Park
Emulation, Inequality, And Work Hours: Was Thorsten Veblen Right?, Samuel Bowles, Yongjin Park
Economics Department Working Paper Series
We investigate Veblen effects on work hours, namely the way that a desire to emulate the consumption standards of the rich induces longer work hours among the rest. Consistent with our model of these asymmetric social comparisons, greater inequality predicts longer work hours in ten OECD countries over the period 1963-1998. The country fixed effects estimates of the impact of inequality on hours are large, robust, and cannot be explained by conventional incentive effects. In the presence of Veblen effects, a social welfare optimum cannot be implemented by a flat tax on consumption but may be accomplished by progressive consumption …