Income Distribution Commons^™

Trouble In The Tails? What We Know About Earnings Nonresponse Thirty Years After Lillard, Smith, And Welch, Christopher R. Bollinger, Barry T. Hirsch, Charles M. Hokayem, James P. Ziliak

University of Kentucky Center for Poverty Research Discussion Paper Series

Earnings nonresponse in household surveys is widespread, yet there is limited evidence on whether and how nonresponse bias affects measured earnings. This paper examines the patterns and consequences of nonresponse using internal Current Population Survey individual records linked to administrative Social Security Administrative data on earnings for calendar years 2005-2010. Our findings confirm the conjecture by Lillard, Smith, and Welch (1986) that nonresponse across the earnings distribution is U-shaped. Left-tail “strugglers” and right-tail “stars” are least likely to report earnings. Household surveys understate earnings dispersion, reporting too few low and too few extremely high earners. Throughout much of the earnings …

Testing For Spatial Lag And Spatial Error Dependence In A Fixed Effects Panel Data Model Using Double Length Artificial Regressions, Badi H. Baltagi, Long Liu

Center for Policy Research

This paper revisits the joint and conditional Lagrange Multiplier tests derived by Debarsy and Ertur (2010) for a fixed effects spatial lag regression model with spatial auto-regressive error, and derives these tests using artificial Double Length Regressions (DLR). These DLR tests and their corresponding LM tests are compared using an empirical example and a Monte Carlo simulation.

Effects Of The Minimum Wage On Employment Dynamics, Jonathan Meer, Jeremy West

Upjohn Institute Working Papers

The voluminous literature on minimum wages offers little consensus on the extent to which a wage floor impacts employment. We argue that the minimum wage will impact employment over time, through changes in growth rather than an immediate drop in relative employment levels. We conduct simulations showing that commonly-used specifications in this literature, especially those that include state-specific time trends, will not accurately capture these effects. Using three separate state panels of administrative employment data, we find that the minimum wage reduces job growth over a period of several years. These effects are most pronounced for younger workers and in …

Wealthy, But Unequal: The Anomaly Of Inequality In The United States, Joseph Puleo

Political Analysis

No abstract provided.

The Effect Of The Earned Income Tax Credit In The District Of Columbia On Poverty And Income Dynamics, Bradley L. Hardy, Daniel Muhammad, Rhucha Samudra

Upjohn Institute Working Papers

Using unique longitudinal administrative tax panel data for the District of Columbia (DC), we assess the combined effect of the DC supplemental earned income tax credit (EITC) and the federal EITC on poverty and income dynamics within Washington, DC, from 2001 to 2011. The EITC in DC merits investigation, as the DC supplement to the federal credit is the largest in the nation. The supplemental DC EITC was enacted in 2000, and has been expanded from 10 percent of the federal credit in 2001 to 40 percent as of 2009. To implement the study, we estimate least squares models with …

The Nexus Of Financial Deepening, Economic Growth, And Poverty: The Case Of Pakistan, Abdur Rehman Aleemi, Muhammad Azam

Business Review

This study investigates the nexus of financial development, economic growth, and poverty for Pakistan over a prolonged period of time, 1960- 2012. Autoregressive Distributed Lag (ARDL)-Bounds testing approach to co integration and Unrestricted Error Correction Model (UECM)along with VECM Granger causality have been applied to examine the long-run dynamic relationship among financial development, economic development and poverty. For that purpose, we have developed two models and adopted a new and relatively strong proxy for financial development. The results suggest that financial development negatively affects both long-run and short-run economic growth. However, financial development is found to be positively affecting per …

An Assessment Of Microlending Programs In The Alabama Black Belt Region, Md Z. Mutaleb, Ntam R. Baharanyi, Nii O. Tackie, Robert Zabawa

Professional Agricultural Workers Journal

Abstract

The objective of this study was to assess the impact of selected socioeconomic factors on microlending in the Alabama Black Belt. It used logistic regression to identify the link between borrower socioeconomic characteristics and loan repayment rate from existing and previous microloan programs. It was hypothesized that borrower gender, age, level of education, household income, and credit score has a major impact on loan repayment. The results of study indicated that only credit score had a statistically significant effect on loan repayment. This finding underscores the importance of credit score and credit repair management in existing microloan programs, given …

The Federal Reserve And A Cascade Of Failures: Inequality, Cognitive Narrowness And Financial Network Theory, Emma Coleman Jordan

Georgetown Law Faculty Publications and Other Works

The recent financial crisis hollowed out the core of American middle-class financial stability. In the wake of the financial crisis, household net worth in the U.S. fell by 24%, for a loss of $16 trillion. Moreover, retirement accounts, the largest class of financial assets, took a steep drop in value, as did house prices, and these two classes of assets alone represent approximately 43% of all household wealth. The losses during the principal crisis years, 2007–2009, were devastating, “erasing almost two decades of accumulated prosperity,” in the words of a 2013 report. By the Federal Reserve. Beyond these direct household …

Three Essays On Racial Wage Differentials In South Africa, Ochas Kashinge Pupwe

Dissertations

Wage gaps amongst the different racial groups in South Africa, have remained high post-apartheid. With the enactment and implementation of several empowerment programs aiming at reversing racial marginalization, it is puzzling to see the persistent wage gaps between the white minority and non-white majority. This dissertation seeks to ascertain factors that may account for the persistent wage gap.

The first essay tests for the presence of over-education and its effects on wage determination amongst South Africa’s racial demographic groups. The results indicate that whites were over-educated whilst marginalized populations exhibited significant levels of under-education in 1991 and 2011 and hence …

A New Approach To Measuring Poverty In The United States: A Household's Ability To Consume, David Ashelman

Applied Economics Theses

The definition of poverty is a social construct. As such, quantitatively measuring poverty is problematic, and creates ineffective poverty-alleviation policy. This thesis examines the historical measure of poverty in the United States, compares U.S. poverty measurements to Great Britain and Canada, and then proposes a new way to measure poverty. Instead of measuring income as the defining factor of poverty, the new poverty measurement suggested eliminates income factors and focuses on a household’s ability to consume in a non-comparative manner. When quantifying a household’s ability to consume, implications arise in economic policy for anti-poverty programs, defining the middle class, minimum …

The Financial Lives Of Low-Income Rhode Islanders: Challenges And Opportunities, Keegan Glennon

Senior Honors Projects

Less fortunate Americans have historically been urged to “pull themselves up by their bootstraps,” implying that prosperity was essentially just a matter of willpower. Over time, however, it has become clear that there are more than a few problems with this conception of American society. If hard work and willpower aren’t all that lower class Americans need to reach prosperity, then what do they need? This has been an issue of much debate ever since the question was first posed. The truth is that that poor Americans face many obstacles in managing their financial lives, and many of these obstacles …

Impact Of Women Empowered Through Community Savings Groups On The Wellbeing Of Their Families: A Study From Mgubwe, Tanzania, James Kesanta, Billy Andre

Interdisciplinary Journal of Best Practices in Global Development

This study explores the impact of economic empowerment among women and the well-being of their families and their communities through a community savings and loans association model. The research, conducted in Mgubwe, Tanzania, consists of 83 respondents from four villages, representing 12 Village Savings and Loans Associations (VSLAs). Qualitative and quantitative data were collected using Focus Group Discussions (FGD), survey questionnaires and key in-depth interview methodologies. The findings indicated women who participate in community-based micro-lending associations have positive impacts on their children’s education, health, and livelihoods. The findings also revealed members of community savings and loans groups do not collectively …

The Economy Of Oaxaca Decomposed, Albert Codina Sala

Honors College Theses

We analyze the internal economy of Oaxaca State in southern Mexico across regions, districts and municipalities from 1999 to 2009. Using the concept of economic convergence, we find mixed evidence for poorer areas catching up with richer areas during a single decade of economic growth. Indeed, some poorer regions thanks to negative growth have actually diverged away from wealthier areas.

Who Benefits From A Minimum Wage Increase?, John W. Lopresti, Kevin J. Mumford

Upjohn Institute Working Papers

This paper addresses the question of how a minimum wage increase affects the wages of low-wage workers. Most studies assume that there is a simple mechanical increase in the wage for workers earning a wage between the old and the new minimum wage, with some studies allowing for spillovers to workers with wages just above this range. Rather than assume that the wages of these workers would have remained constant, this paper estimates how a minimum wage increase impacts a low-wage worker’s wage relative to the wage the worker would have if there had been no minimum wage increase. The …

Determining The Effect Of The Minimum Wage On Income Inequality, Benjamin S. Litwin

Student Publications

Many recent studies have shown a significant increase to income inequality since the 1980s. One of the proposed methods for fixing this trend is to increase the minimum wage, since this policy would help those at the low end of the income spectrum to see economic growth. To analyze the effectiveness of this policy, we studied data from countries that are part of the Organization for Economic Development and Cooperation. By forming an econometric model to account for many factors that affect income inequality in nations around the world, including the real value of the minimum wage, we can determine …

Women's Social Rights: Untapped Economic Potential, Monae S. Evans

Student Publications

This paper analyzes whether women’s social rights play a role in fostering higher levels of economic development. Prior development initiatives and economic policies failed to account for the productive capacities of women by discriminating against their basic rights to things such as an equitable education, equal inheritance, and marital rights. Applying the CIRI (Cingranelli-Richards Human Rights) dataset for women’s social rights, I found that improvements in these areas of human rights leads to significant increases in real GDP per capita, which highlights the need for development analysts and economists to focus their attention on countries’ most viable productive resource, women.

Impact Of Household And Demographic Characteristics On Poverty In Bangladesh: A Logistic Regression Analysis, Nusrat Farah

2015 Awards for Excellence in Student Research and Creative Activity - Documents

Poverty is multi-dimensional in nature and depends on interactions of various socio-economic factors. Several demographic and health factors can shape up the economic status of a household, and theory suggests that the ability of a household to earn a given level of income can depend on the characteristics internal to the household. While most studies done on poverty measurements rely on the income, expenditure and consumption data, this study has used data from Bangladesh Demographic and Health Surveys (DHS). The main objective of this paper is to identify the factors that have relative effect on poverty of the household. The …

Economic Interrelationships And Impacts Of The Aviation/Aerospace Industry In The State Of Florida Using Input-Output Analysis, Kelly A. Whealan-George

Doctoral Dissertations and Master's Theses

The study provided a detailed description of the interrelatedness of the aviation and aerospace industry with principal industries in Florida and Volusia County (VC) using Input-Output (IO) analysis. Additionally, this research provided an economic impact analysis of the creation of a university research park in Daytona Beach (DB). The economic impact measures included not only direct economic output and industry employment descriptions but also described the multiplier effects in the form of indirect and induced impacts using data for 2012.

This research concluded the average labor income of the aviation and aerospace industry was higher than average labor income in …

Economic Development And Female Labor Force Participation In The Middle East And North Africa: A Test Of The U-Shape Hypothesis, Kelsey A. Chapman

Gettysburg Economic Review

This paper investigates the relationship between economic development and female labor force participation in the Middle East and North Africa (MENA). Using a panel data set of 20 countries in the region for the period of 1990-2012, I develop an econometric model that tests the U-shape hypothesis. This study builds upon previous literature examining the U-shape hypothesis in time series studies for developing countries, and cross-country studies. The results of this paper suggest that there is a U-shaped relationship between economic growth and female labor force participation rates. The MENA region’s low female labor force participation rates can be explained …

Firm Size, Foreign Exposure And Inequality In Wage: A Decomposition Analysis, Satis Devkota, Kul Kapri, Mukti Upadhyay

Economics & Management Publications

This study uses pooled cross-section data from two large surveys of firms in Nepal to determine wage inequality. Applying an inequality decomposition procedure, the estimated wage inequality is then attributed to various factors that affect the labor demand function in the country. We find that firm size and exposure of firms to international trade are among the factors showing statistical significance in affecting wage disparity in Nepal. To the extent wage inequality can be attributed to the factors considered in this study, firm size alone accounts for 55 to 84 percent of the inequality depending on the size indicators such …