Impact of Internal In-Migration on Income Inequality in Receiving Areas: A District Level Study of South Africa

The impact of internal migration on regional income inequality of the receiving areas has hitherto gone largely unstudied. This dearth of literature is especially surprising because income inequality and in-migration into urban centres of growth are two issues that many developing economies are faced with and tackling these issues effectively involves understanding the interactions between these two related phenomena. This study is therefore a first attempt to analyse the impact of internal in-migration on receiving areas and is placed in the context of South Africa. Based on a conceptual analysis, the study argues that in-migration into the formal sector of the receiving areas will in general reduce inequality while in-migration into the informal or unemployed sector increases inequality. Using individual panel data the study further tests empirically at the district level the impact of in-migration and finds that rising urban inequality in urban areas can be attributed at least in part to rural-urban migration. This works through both the wage as well as employment channel. The employment channel can be said to have a stronger impact than the wage channel as indicated by the coefficients estimated through our system GMM regression analysis.     

Price policy,poverty, and power within rural West African households

This paper explores the impact of agricultural price policy on poverty in West Africa, a region in which prices are an important tool for raising rural household incomes. A game-theoretic, collective model of household income generation and resource allocation is developed that incorporates three features typical of West African rural households: preference heterogeneity among women and men, individual resource control, and power-mediated bargaining over resource control in the face of changes in households' economic environments. To explore price effects, the model is used to simulate the income impacts of large increases in cotton prices accompanying fast-paced agricultural liberalisation in Burkina Faso in the 1980s. The paper shows that where resources are controlled individually by household members, rather than pooled, Pareto efficiency in income generation does not hold. The impact of agricultural price policy on poverty is mediated by bargaining over resource control within households. Both the relative bargaining power of women and men and the degree of preference heterogeneity between them play fundamental roles in the outcome of such bargaining. The results point to a lower ability of households to take advantage of price incentives and thereby raise their incomes than a unitary household model, in which preferences do not differ and resources are pooled, predicts. They suggest that the effectiveness of price policy in reducing poverty in the region would be enhanced by taking into account the incentive structure within households as well as individual household members' ability to bargain over the benefit and cost streams flowing from price changes.     

Is There a Social Kuznets Curve? The Influence of Labour Standards on Inequality

This study empirically investigates the impact of core labour standards on income inequality for a range of 90 countries from 1990–2000. A synthetic index of labour standards is computed by means of a Multiple Correspondence Analysis and no significant correlation is found with the Gini index. One of the reasons pointed out is that the effective implementation of core labour standards depends on the quality of the country's political and legal systems. Using instrumental variables in a TSLS model, we found an inverse ‘U’ shaped curve between the new endogenous index of core labour standards and income inequality.     

Inequality and Support for Political Engagement in New Democracies

Existing studies of income inequality and political participation—including related literature, for example, on preferences for redistribution—leave us with the question of whether citizens see political democracy as offering ways to challenge market inequalities. Using original surveys in 13 Central and Eastern European countries, I find that those who see high and undesirable levels of income inequality have stronger demands for popular democratic participation than those who do not. In addition, neither the aggregate levels of support for political engagement nor individuals’ perceptions of inequality are coordinated with either national-level indicators of income inequality or democratic performance.     

Income inequality and level of corruption in post-communist European countries between 1995 and 2014

This paper analyses the relationships between income inequality and corruption in Europe and looks specifically at post-communist European countries. The scientific community agrees that there is important relationship between income inequality and corruption and many authors believe that low income inequality is connected to low corruption. According to empirical papers, this is true not only on the European scale, but also on a global scale. In this paper, I test this claim by conducting a multilevel analysis on 39 European countries in the period of 1995–2014. This model ascertains that there are immense differences between post-communist countries and the rest of European countries. The effects of income inequality on the level of corruption are discussed.     

Income, Occupation, and Preferences for Redistribution in the Developing World

Much of the theoretical work on preferences for redistribution begins with the influential Melzer–Richard model, which makes predictions derived both from position in the income distribution and the overall level of inequality. Our evidence, however, points to limitations on such models of distributive politics. Drawing on World Values Survey evidence on preferences for redistribution in 41 developing countries, we find that the preferences of low-income groups vary significantly depending on occupation and place of residence, union members do not hold progressive views, and inequality has limited effects on demands for redistribution and may even dampen them.

Do Relative Income and Income Inequality Affect Consumption? Evidence from the Villages of Rural China

This article examines how a household's consumption rate is affected by its relative income and income inequality within a community. Based on the theory of social status seeking in consumption, we test hypotheses related to these factors using a unique panel data set of rural households in China observed within a few hundred villages between 2003 and 2006. We find that the household's consumption rate is negatively related to the relative income position after controlling for the absolute income, and positively related to the income inequality of the village. We confirm these with different measurements of relative position.     

The Political Economy of Tanzania: Decline and Recovery,Edited by Michael Lofchie,Philadelphia: University of Pennsylvania Press, 2014, pp. 265, £39, ISBN 9780812245905

Each reform implies social and economic changes. After experiencing war and reunification, today Vietnam is implementing a comprehensive and deep process of renovation (doi moi), but a revolution needs the support of the population to be successful. This article investigates whether the Vietnamese are supportive of some of the main features of a market economy. In particular the preferences for competition, ownership of firms (either private or public) and income inequality as an incentive to productivity are studied here. The data allow us to conclude that the doi moi is not at risk, but the population tend to contrast income inequality.     

Consumption vulnerability to risk in rural Pakistan

As one of the dimensions of vulnerability, this paper empirically investigates the inability of rural dwellers to cope with negative income shocks. A variable coefficient regression model is applied to a two-period household panel dataset collected in the North-West Frontier Province, Pakistan, an area with high incidence of income poverty and low human development. The empirical model allows for a different ability to smooth consumption, approximated by a linear function of households’ attributes, and controls for the endogeneity of observed changes in income, using qualitative information on subjective risk assessment. Estimation results show that the ability to cope with negative income shocks is lower for households that are aged, landless and do not receive remittances regularly.     

Prohibitive tariffs on used vehicles: Aid or obstacle to the development process?

One of the protective devices used by less developed nations to stimulate their automotive industries is a prohibitive tariff on used vehicles. The purpose of this note is to demonstrate that this restriction, via adjustments in the stock and age composition of vehicles, might reduce employment in the tariff levying nation's automotive industry, might increase that nation's demand for foreign exchange, and will violate stated (egalitarian) income distribution goals.

The behaviour of the individual vehicle consumer will be analyzed first and market consumption adjustments brought about by various vehicle tariffs will be determined. Supply characteristics of the automotive industry are then presented, and the employment effects of a prohibitive tariff on used vehicles will be examined. Balance of payments and income redistribution effects are briefly considered.     

Inequality,earnings and participation among the poor in rural India

Emphasising that there is a relative dimension to deprivation, an attempt is made here to decompose income inequality among the rural poor into inequality in earnings per worker, in participation rate and covariance of earnings per worker and participation rate. From this decomposition, the effects of (small) changes in inequality in earnings per worker and in participation rate on income inequality are evaluated. The analysis is based on a cross‐section of rural households in 1970–71. The samples of poor cultivating households and poor casual agricultural labour households are analysed separately for each of two regions, based on a classification of villages in terms of technological advancement.     

Exploring income inequality in rural,coastal Viet Nam

Income inequality has been rising in parallel with the economic liberalisation process in the former centrally planned economies. The opportunities for non‐agricultural income associated with the market liberalisation process in former centrally planned economies would seem to be important in determining inequality within the rural sector. This article reviews the trends in inequality in Viet Nam examining differential trends and hypothesised causes. Inequality is important because of its relationship to other factors in the evolution of the agricultural economy such as the incidence of poverty and the sustainability of emerging income sources. This article analyses income inequality based on data collected by the author in two Districts in coastal northern Viet Nam. The results demonstrate that non‐agricultural income sources, specifically aquaculture and wage and remittance, contribute more to present inequality than any other income source. Simulation shows that the emergence of aquaculture since the late 1980s has been driving the inequality increase in that period. Hence the analysis provides evidence that non‐agricultural income increases inequality even without asset concentration. This concentration of income is important in the north Viet Nam context since it is concurrent with present‐day land allocation and will affect the structure of future income growth.     

Income Inequality and Redistributive Spending: Evidence from Panel Data of Texas Counties

Abstract

The relationship between redistributive spending and income inequality has been of interest to researchers for several decades. Existing literature has largely focused on country-level studies and may be broadly divided into two groups: studies that find a positive relationship between the two and studies that find a negative relationship. The positive association is usually explained through the median voter theory and the negative association through the social insurance theory.

This study offers a test of the median voter and social insurance hypotheses by examining the relationship between economic inequality, voter turnout and redistributive spending at the sub-national level among the 50 largest counties in Texas over years 2006 to 2012. One of the advantages of using a regional sample is that counties are relatively more homogeneous and allow for the collection of better records across time. Random effects models suggest that income inequality is positively associated with redistributive spending. The study improves our understanding of the patterns of redistribution at the sub-national level and highlights the importance of careful inter-temporal modelling of relationships between redistributive spending and inequality.     

PUBLIC RESPONSIBILITY AND INEQUALITY IN HEALTH INSURANCE COVERAGE: AN EXAMINATION OF AMERICAN STATE HEALTH CARE SYSTEMS

This article examines the effect of the three publicness dimensions on inequality in health insurance coverage across 50 American state‐level health care systems. The analysis validates a Gini‐coefficient measure of Americans' unequal distribution of health insurance coverage across nine income groups and compares public ownership, financing, and control of health care systems across all 50 states from 2002 to 2010. There is a significant and negative relationship between public ownership and inequality in health insurance coverage, although the substantive impact of ownership is relatively small. Both public financing and control substantially reduce inequality in health insurance coverage across income groups. However, both of these must be present in order to be effective at reducing inequality. This article expands our understanding of the link between different institutional arrangements and inequality in health insurance coverage in hybrid health care systems.     

Joint care and joint funding

One of the most important possible sources of conflict of interest between central and local governments is difference in political preferences with respect to, for example, income redistribution. If local governments are of a different political composition than the central government, they may be inclined to reinforce or weaken the redistribution policies as pursued by the central government. We empirically test whether local governments in the Netherlands do pursue income redistribution policies over and above the central government's redistribution policy and we find that the distribution of the local tax burden over the various household types differs according to the political composition of the local council.     

Information source preference and dental selection

Previous literature provides insights into the role information source preference plays in consumer selection of products. The results of an empirical investigation provides evidence of the possible relationship among information source preferences with consumer decisions related to dental consumer needs. The primary findings suggested a relationship between certain information source preferences and both a consumer dental care selection situation and certain consumer demographics.     

Inequality and Economic Growth: The Empirical Relationship Reconsidered in the Light of Comparable Data

Almost all the recent empirical work on the relationship between income inequality and economic growth has used inequality data that are not consistently measured. This article argues that this is inappropriate and shows that the significant negative correlation often found between income inequality and growth across countries may not be robust when income inequality is measured in a consistent manner. However, evidence is found of a significant negative correlation between consistently measured inequality of expenditure data and economic growth for a sample of developing countries.     

A Macro–Micro Analysis of the Effects of Electricity Reform in Senegal on Poverty and Distribution

This paper uses a computable general equilibrium (CGE) macro–micro model to explore the distributional effects of price reform in the electricity sector of Senegal. In the first part of the paper we analyse the distribution of electricity in Senegal by income quintiles, between 1995 and 2001. The analysis demonstrates that poor and rural households are not the main beneficiaries of the expanded network. The results of the CGE model show that direct price effects are weaker than general equilibrium effects on poverty and inequality. Moreover, compensatory policies tested can help attenuate some adverse effects.     

Portfolio Behaviour in a Flow of Funds Model for the Household Sector in India

We estimate a flow of funds model for the household sector in India, within the Almost Ideal Demand System (AIDS) framework, and examine the demand for money and the substitution effects between money and other financial assets. The restricted long-run model, obtained using cointegration techniques, provides stable equilibrium relationship between I(1) variables and broadly satisfies the axioms of rational choice in consumer demand theory. We find that financial sector reform exerts a significant impact on the interest rate structure and household portfolio preferences; specifically, there is strong substitutability among risk-free assets and a possible speculative effect in the stock market, while the exchange rate strongly influences the demand for money. These findings all have important policy implications.     

Does Changing Economic Well-Being Shape Resentment About Inequality in China?

The political consequences of income inequality in China have attracted increasing attention among researchers, and conventional wisdom states that economic development can mitigate negative views on inequality. I investigate the effects of subjective and objective changes in economic well-being on public opinion concerning income inequality based on a 2004 Chinese national survey. On the one hand, I find weak evidence of a negative correlation between perceived better economic well-being and negative opinion about inequality in China. On the other hand, I identify consistent evidence of a negative correlation between objective intergenerational upward mobility and negative views about inequality. It is worth noting that while the effect of intergenerational upward mobility is large, it is unable to completely reverse negative views about inequality among Chinese citizens. Hence, I suggest that economic development plays only a limited role in mitigating anger about inequality in China.