Changes in human capital and earnings inequality: Recent evidence from Brazil 1

Abstract

This paper estimates changes in the rates of return to human capital across the earnings distribution using data from over a 10-year period for Brazil. It uses these estimates to simulate the separate impacts of changes in returns to skills and changes in the supply of skills on earnings inequality. Evidence points strongly to growing inequality in rates of return to education in Brazil. This finding suggests that recent macroeconomic and trade reforms have been of most benefit to the skilled rather than the unskilled. Supporting evidence points to an improved competitiveness in the labour market, with workers increasingly rewarded for productivity. However, although increases in returns to education are more pronounced at the top of the earnings distribution, this did not in practice led to increased inequality. This is because levels of education and other labour market-rewarded endowments have increased and offset the rate of return effect. Appropriate education policy is therefore an essential partner for macroeconomic and trade reform if a developing economy is to avoid worsening income inequality.     

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.     

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.     

Bolsa Família and democracy in Brazil

The conditional cash transfer (CCT) programme Bolsa Família (Family Allowance), introduced in Brazil in 2003, is one of the largest such programmes in the world. Bolsa Família has played a role in the recent reduction of poverty and income inequality in Brazil. But what has been its impact on democracy? An assumption in the literature on social policy, derived from the European experience, is that targeted programmes such as Bolsa Família divide citizens, erode trust between citizens and between citizens and the state, and weaken democracy. This article challenges that assumption, showing that there is considerable evidence that Bolsa Família has strengthened the citizenship rights of the poor and enhanced democracy. The Brazilian experience suggests that, in highly unequal developing countries under conditions of 21st-century capitalism, the argument that targeted social programmes will inevitably undermine democracy is incorrect.     

Illiberal Democrats versus Undemocratic Liberals: The Struggle Over the Future of Thailand's Fragile Democracy

Abstract

This article examines the inter-related factors that underpin the fragility of Thailand's democracy. Uneven economic development, the high levels of income inequality, and unequal access to power and resources are significant drivers of Thailand's ongoing political conflict. Social divides across classes and regions, and populist exploitation of the rural poor's sense of alienation from the traditional ruling elites, provide a volatile backdrop to national politics. In addition, Thailand's unstable political history and the weakness of liberal institutions present risks to its democracy. The army, the revered monarch and the judiciary comprise elites whose periodic interventions in politics and reservations about electoral democracy further render the Thai polity fragile. Thailand's political situation represents a ‘slow-burning’ crisis of democracy: a long-term historical confrontation developing slowly, with the fundamental issues unresolved. It is undergoing a period of social turmoil fuelled by a power struggle between competing material interests and by an ideational contest to determine the country's constitutive political rules. This can be conceptualised as a struggle for control of Thailand's future between a heterogeneous populist-capitalist movement of illiberal democracy and conservative forces of undemocratic liberalism.     

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.     

Foreign Aid and Illegal Immigration

Abstract

Gaytán-Fregoso and Lahiri (2000) claim that foreign aid may increase the level of illegal immigration. This comment reconsiders their perverse findings under endogenous as well as exogenous income repatriation. Furthermore, modifying Gaytán-Fregoso and Lahiri's model, in which aid is allotted in a lump-sum fashion, it is suggested that the actual amount of foreign aid should depend on the source country's performance, i.e., on the number of illegal immigrants, since such a policy will further reduce the number of illegal immigrants.     

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.     

Health,Poverty and Service Use Among Older West Indian Women in Greater Hartford

SUMMARY

This study brings to light the phenomenon of aging in the West Indian migrant community in the United States. It presents the results of a cross-sectional exploratory survey of 107 community-dwelling West Indian women aged 55 years and over living in the Greater Hartford region of Connecticut. The data analysis reveals positive self-reports of health and few limiting or disabling conditions. However, there is substantial income inequality, a negative relationship between age group and income and limited use of services among those women most likely to require them. The findings suggest that some of the qualities which contributed to West Indians becoming the “Black success model” in the U.S. may be counterproductive for successful aging. A community-based strategy for addressing these issues is outlined.     

Small-Scale irrigation and income distribution in Ethiopia

Abstract

Irrigation stimulates agricultural productivity and economic growth, but this may come at the cost of growing inequality. Using data at community and household level, this paper analyzes the distributional impacts of irrigation in Ethiopia. Regression analyses reveal the direct effects of irrigation on expenditures and labour demand, and the indirect effects of irrigation on food prices and expenditures of non-irrigation households. The results indicate that past development of irrigation stimulated growth without deepening inequality, and that irrigation decreased dependence on food-for-work programs. Thus, irrigation has played a positive role in the development of Ethiopia.     

The spectre of Haiti: structural antiblackness,the far-right backlash and the fear of a black majority in Brazil

Abstract

This article situates the far-right backlash in Brazil within the larger Latin American context, including its colonial legacy, leftist governments’ failure to deliver promises of inclusion, and the US–China geopolitical dispute over the region’s strategic natural resources. By situating Bolsonaro’s electoral victory within these dynamics, our analysis presents an alternative to two common perspectives. First, studies of the region’s political moment and of Brazilian society in particular do not pay enough attention to institutional and everyday racism, and instead focus mostly on comparative analysis of governmental policies and social class dynamics. Second, critical perspectives that take into account racial inequalities are often not attuned to structural dynamics of gendered antiblackness, and instead present racism as a broad set of practices that negatively affect non-white people in related manners. Our context-specific analysis of the electoral reemergence of the far right in Brazil aims at contributing to an understanding of persistent dynamics of racial inequality within the region as part of a long, enduring and foundational odium of Black people.     

The impact of the gender composition of households on inequality and poverty: a comparison across Russia and Eastern Europe

This study compares poverty and income distribution among gender subgroups in Russia and four East European countries—Bulgaria, Romania, Hungary and Poland—in 2000. Does the gender poverty gap exist in these countries and if yes, how big is it? How much does the level of gender inequality contribute to explaining the level of aggregate inequality and poverty within each country? To what extent may the differences emerging in cross-country comparisons of poverty and inequality be explained by differences in the gender composition of households, e.g., the prevalence of female-dominated households? These are the questions I seek to answer in this paper.Equivalent expenditure is adopted as a measure of economic welfare of households with different gender ratios. The gender gap is defined as the degree of distance between the economic welfare of households dominated by women and households dominated by men. Headcount poverty and average poverty shortfalls are calculated using relative poverty lines. Inequality is measured by Gini and Theil L coefficients.     

Building Support for the Asad Regime: The Syrian Diaspora in Argentina and Brazil and the Syrian Uprising

ABSTRACT

Brazil and Argentina are hosts to two of the largest populations of Syrian descent in Latin America. While Syrian immigrants and their descendants have usually defined their identities based on broad Arab nationalistic references, creating and affiliating themselves to Syrian-Lebanese and/or Arab institutions, the ongoing civil war in Syria has triggered an unprecedented mobilization around specifically Syrian issues. Most diasporic organizations have shown an unconditional support for the Ba?thist regime. This article aims at understanding the political mobilization of the Syrian diaspora in Argentina and Brazil, as well as unveiling how Bashar al-Asad's government has tried to build on their support.     

Uncertainty,risk, and wealth and income distribution in peasant agriculture

An ethical justification of the market system is that while generating inequality of income distribution it nevertheless provides an equal opportunity for people to improve their material well‐being (1, p. 169). It is argued that the market system creates a society of unequals, but that it is a fluid society in which, though all may not improve absolutely and relatively, the opportunity to do so is randomly distributed through the population. In terms of economic development, this implies that within a free market framework, the distribution of the gains from growth need not be biased towards any economic class. To use a cliche, one of the justifications of a competitive market system is that there is nothing inherent in its operation which makes ‘the rich get richer and the poor get poorer’. The main barriers to economic and social mobility are thus treated as imperfections in the market—racial and ethnic discrimination, differential access to capital markets, traditional constraints on job choice, and so on.

Recently Michael Lipton has suggested an analytical framework for explaining the optimizing behaviour of peasant cultivators which challenges this sanguine view (2). His ‘survival algorithm’ implies that inherent in the market organization of economic society is a tendency for the benefits from economic development to be distributed systematically in favour of the wealthier groups in the society.

In the following section I shall summarize Lipton's hypothesis and demonstrate its implications for the distribution of wealth and income over time in the agricultural sector of developing countries. In Section III policy conclusions of the analysis are presented.     

A test of the escape from the persistence of backwardness

A model was constructed and estimated for the Japanese economy from 1872 to 1937. Although the model is limited in scope due to limited data availability, it is capable of testing the escape from the trap hypothesis of which Japan is a popular candidate. An examination of the basic difference equation in all periods indicated that Japan did escape the trap during the period 1873–74. Care should be taken in evaluating the evidence. Clearly, the trap is not verified within the range of the data. Consequently, what appears to be evidence of an escape from the trap is suspicious. An economy could tend to move away from an unstable equilibrium level of per capita income without moving toward a low level stable equilibrium level of per capita income when the rate of change in per capita income is negative. But the evidence does support a turning point in Japan's efforts to develop. After 1873–74 Japan was able to achieve a sustained rise in per capita income. The results of this study identify an escape from a persistence of backwardness in terms of per capita income regardless of whether or not that escape was one from a low level equilibrium trap.     

Inequality,Economic Development,and Democratization

Although multiple theories suggest that economic development and inequality somehow affect democratization, these claims have received only limited empirical support. I contend that much of the confusion stems from the implicit assumption held by the literature that development and inequality affect democratization independently of one another. In this paper, I argue that the effect of income distribution on democratization is in fact contingent on the income level: in middle-income countries inequality fosters democratization; in rich countries, however, it harms democratization. Using a data set covering almost all autocracies between 1960 and 2007, I find evidence consistent with my hypothesis.     

Evaluating the Role of Subsidy Reform in Addressing Poverty Levels in Malaysia: A CGE Poverty Framework

Abstract

Malaysia as one of the top subsidised countries around the world has launched to reduce subsidies to capture its development goals. This study, therefore, analyses the effects of the subsidy reform on the macroeconomic, welfare and poverty levels of Malaysia by applying a CGE model. The findings suggest that subsidy removal leads to significant falls in both income and consumption of rural, urban and non-citizen households, and consequently decreases their welfare. However, poverty levels among rural households will most likely increase significantly when compared to urban households due to their relatively low level of income compared to other groups.     

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.     

Economic growth,income inequality and poverty in china under economic reforms

China's gross domestic product (GDP) more than quadrupled between 1978 and 1996 under economic reforms. Per capita disposable incomes more than tripled in the cities and almost quadrupled in the rural areas. However, rapid economic growth brought about large income inequality which slowed down poverty reduction. In 1995, there were still 70–170 million people living in poverty. This article aims to assess the relationship between economic growth, income inequality and poverty using both secondary and household survey data. The main findings are (1) urban/rural divide and spatial inequality are two major factors accounting for overall income inequality; (2) non‐wage and non‐farm incomes are more unequally distributed than wage and farm incomes; and (3) the incidence of poverty is very sensitive to the changes in per capita income and inequality.     

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.