Wealth, Tax and Inequality
Paper Session
Saturday, Jan. 7, 2023 2:30 PM - 4:30 PM (CST)
- Chair: Thomas Rabensteiner, University of Greenwich
What Would Have Been the Impact of Huey Long’s “Share Our Wealth” Plan on the Level and Inequality of Income?
Abstract
Huey Long proposed a radical program of wealth and income redistribution as an alternative to the New Deal that he called the "Share Our Wealth" movement. This would involve a cap on inheritances, wealth, and income, effectively a 100% tax, as well as a guaranteed minimum income for households, free college, old age pensions, and many other policies. Using estimates of the income distribution in the 1930s and modeling behavioral responses to 100% tax rates, I estimate the impact on the distribution and level of income in the United States in the 1930s had this program been implemented.Wage Employment or Self-Employment? A Gender Analysis of Graduates’ Choice for Jobs in India
Abstract
One of the most predominant contemporary public policy debates in India is to boost up self-employment opportunities among the youth, specifically for women-folk, and this is linked to the ‘demographic dividend, the country is currently passing through. It is argued that entrepreneurial skills and attributes achieved through higher education play a critical role in driving up self-employment (vis-à-vis wage and salaried jobs) opportunities in India. While we find a few recent works on examining the role of higher education and training on job preference, studies in understanding the issue through a gender lens are sparse. Given the patriarchal set-up of the Indian society and also wide gender inequality in subject choice (significantly a smaller number of women enrol in STEM courses) in higher education, it is critical to look at the gender inequality in graduates’ choice for jobs. Using a nationally representative household survey data, this paper analyses the gender differences in the employment preferences (wage employment vis-à-vis self-employment) among university graduates in India. Specifically, we analyse how the socioeconomic and demographic characteristics of the students matter in explaining such variations. We find that female graduates have significantly higher chances of getting employment in wage/salaried jobs (over self-employment) as compared to males – with stark differences by household’s economic status and region. Also, females with postgraduate degrees and with technical qualifications are more likely to be employed in salaried occupations. We provide evidence that young graduates (particularly male youth) are more likely to go for self-employment than their older counterparts. The findings of the study are instrumental in understanding the changing contours of the labour market for higher education graduates in India through a gender lens.Income Inequality and Political Instability
Abstract
Income inequality is often regarded as an inevitable phenomenon which is caused by the competition for resources in the market. However, given inequality is a fundamentally political issue, it may also have political consequences in the form of rising social discontent and political instability. While there are few studies finding the politically destabilizing effects of income inequality, no consensus has been reached as to what exactly is the channel through which the latter affects political instability. Our research tests the hypotheses that (i) civic participation mediates the relationship between income inequality and political instability, and that (ii) institutional quality moderates the relationship between income inequality and civic participation on the one hand, and between civic participation and political instability on the other. Our regression results obtained from panel data for an unbalanced sample of 180 countries over the period from 1996 to 2019 suggest that the effect of income inequality (i.e., the standardized Gini index) on political stability is conditional on the quality of institutions: at low levels of institutional quality an increase in Gini is strongly associated with higher political instability, while this destabilizing effect fades away with improvements in the quality of institutions. As for the transmission mechanism, we find that absent the necessary institutional environment, higher income inequality leads to higher civic participation, which in turn leads to more political instability. When a country has sufficiently high quality of institutions, however, greater income inequality neither increases civic participation, nor worsens political stability.Mind the Gap: Analysing Inequality in Access to Higher Education in India between the Poor and the Rich
Abstract
Rising inequalities in the society are indeed becoming an important concern of all. Among inequalities in different spheres, inequalities in education, and inequalities in higher education in particular are seen as too serious to ignore any more. The available studies on inequality to access higher education in India have largely examined the issue from gender and social category of the students; too little is done by examining income as a determining factor. Using nationally representative household surveys, conducted by the National Statistical Office of the Government of India, an attempt is made here to examine the income inequality and access to higher education in India. The analysis shows that the inequality in access to higher education has increased substantially by household‘s economic status in the last seven years. Though the overall gender inequality has come down significantly, this is very high between the rich and the poor. The inequality in access to HE also varies considerably between rural and urban regions. The logit results lead us to conclude that rich income groups have a higher probability of attending higher education institutions than others. The difference in the probability of participation between men and women narrows down as one move from poorest to richest quintiles. Recent debates on higher education in India have raised a variety of interesting policy related issues and through this empirical study the author has highlighted a few of them, particularly the interaction between income inequality and access to higher education, with the aim to facilitate a more informed policy discourse on this.Natural Amenities and Neo-Hobbesian Local Public Finance
Abstract
A revenue maximizing local government must obey a migration constraint when levying taxes. Using this insight, I develop a simple theory of taxation that suggests natural amenities are a key factor influencing local tax rates. Natural amenities confer rents to residents which governments and interest groups compete to extract. Revenue maximizing local tax rates are increasing in the level of natural amenities, increasing in moving costs, and decreasing in households’ reservation utility. Using data on natural amenities and taxation for US counties, I find that local tax rates are in-fact increasing the level of natural amenities. Finally, I suggest an alternative interpretation of the “tax revolts” of the late 1970’s. Rather than an attempt to constrain Leviathan, local property tax reform (such as California’s infamous Proposition 13) and restrictions on housing supply are the outcome of competition over amenity rents in which property owners successfully capture a monopoly position at the expense of other social groups including renters and local government.JEL Classifications
- D3 - Distribution
- D6 - Welfare Economics