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So were his 2003 paper with Shaohua Chen on "Measuring Pro-Poor Growth", which first introduced the now widely used concept of growth incidence curves (Ravallion and Chen [6]) and his solo paper in the I American Economic Review i on "Why Don't we see Poverty Convergence?" Third, and perhaps most influential of all, was Ravallion's work on international poverty comparisons and global poverty measurement. GRAPH Martin Ravallion, a leading development economist and poverty scholar, died on 24 December 2022 in Washington, DC, at the age of 70. [Extracted from the article]

The measurement of inequality and its determinants are major tasks within the economic literature. The main objectives of this paper are to identify patterns of convergence in the income inequality in European Union countries and to investigate the factors behind the formation of convergence clubs. For those purposes and considering the Gini index during the period 2007–2018, the club convergence approach and an ordered logit model are employed. The results show four clubs and four divergent countries. In addition, the analysis identifies certain factors, such as economic openness, public intervention and education, as the main drivers of inequality reduction. Finally, the results from the club convergence analysis for an alternative inequality measure, specifically the ratio 80:20, are similar to those achieved in the case of the Gini index. [ABSTRACT FROM AUTHOR]

This paper contributes to the literature that postulates a relationship between income inequality and the relative importance of "market" and "organization" in the direction of resources. The paper emphasizes that both are endogenous; therefore, the empirical associations observed in the empirical data between inequality measures and production organization variables cannot be interpreted as indicative of causal relationships. The paper solves for the composition and size of occupational groups, the distribution of firm size, and the distribution of income as market equilibrium outcomes of an occupational choice economy, and performs a comparative static analysis. We find that the interaction between cross‐economy differences in the distribution of general skills in the labor force and the loss of control in the supervision of workers by managers can explain the empirical regularities observed in the relationship between the organization of production (distribution of firm size) and income inequality (distribution of labor income). This explanation of the empirical regularities differs from others proposed in the literature, such as those based on institutional constraints or the market power of firms. [ABSTRACT FROM AUTHOR]

Smart city construction is an essential practice in the effort to promote the digital transformation of society as a whole. Taking China's 'National Smart City' pilot project as a quasi‐natural experiment, this paper studies the income distribution effect of smart city construction by building a differences‐in‐differences model and using the data of China's prefecture‐level cities from 2008 to 2018. The results show that implementing China's 'National Smart City' pilot project has significantly reduced regional income inequality. However, this effect has heterogeneity. In regions with a higher level of economic development, human capital accumulation and R&D investment, the impact of smart city construction on reducing income inequality is stronger. In areas with a higher level of human capital accumulation, smart city construction can reduce income inequality. However, this effect is insignificant in areas with a lower level of human capital accumulation. Mechanisms tests show that smart city construction can reduce regional income inequality by creating more jobs, narrowing the digital divide and improving public service delivery. As stated above, this paper implies that accelerating the construction of smart cities and improving the digital and intelligence levels of the wider society is of great significance to reducing income inequality and building a more reasonable income distribution structure. [ABSTRACT FROM AUTHOR]

Legal land transfer rights are the core of farmers' land property rights. This paper examines the urban‐rural income distribution effect of legal land transfer rights, revealing the reasons and mechanisms for legal land transfer rights to reduce the urban‐rural income disparity. Theoretical analysis shows that granting farmers legal land transfer rights and enhancing the protection of land transfer rights can help promote rural labor migration, thereby reducing the urban‐rural income disparity. This study uses panel data of prefecture‐level and above cities in China from 1999 to 2008 to examine the implementation of China's Rural Land Contracting Law in 2003 as a quasi‐natural experiment to construct a difference‐in‐differences (DID) model for the empirical test. The findings reveal that legal land transfer rights can effectively promote rural labor migration and reduce the urban‐rural income disparity due to labor migration. This paper's analysis provides a perspective for understanding the integrated development of urban and rural areas in developing countries. It indicates that guaranteeing farmers' land transfer rights is important for reducing urban‐rural income disparity, leading to urban‐rural integrated development. [ABSTRACT FROM AUTHOR]

The aim of this paper is to address the dynamics of contemporary cultural capital by interrogating what counts for young people as valuable cultural resources. Considerable support is given in later scholarship for Bourdieu's model of the social space, as the overall volume of economic and cultural capital combined is regularly found to be the most important axis of opposition, just as in Bourdieu's work Distinction. Yet, while Bourdieu found the second axis to be structured by an opposition between those with cultural rather than economic capital, and vice versa, many later studies instead find oppositions between the young and the old to structure the second axis. Up till now, this finding has not been adequately addressed. In this paper, we hold that considering age‐related inequalities offers a powerful way of interpreting recent developments in order to understand the changing stakes of cultural capital, and also their interaction with the intensification of inequalities in economic capital. After a theoretical clarification of the relationship between cultural capital and youth, we will synthesise research on young people and explore the significance of youthful cultural consumption. We will pragmatically focus on the 15–30 years old and put a particular accent on Norwegian studies in our review, as they are the most sophisticated in this genre. Four areas are explored: the restricted role of classical culture; the appeal of popular culture; digital distinctions, and moral‐political positions as markers of distinction. [ABSTRACT FROM AUTHOR]

The paper is concerned with the contemporary relevance of caste to agrarian capitalism and the relations of dependency and allegiance it fosters in a village of Andhra Pradesh. It deploys the method of village study to examine the two‐way interaction between agrarian class and caste relations and the emerging rural‐based informal nonfarm economy. It elaborates the continuation of relations of debt, dependency, and political allegiance fostered by landlordism despite significant diversification to nonfarm by landlords and labour and identifies the crucial role of land inequality and the working of ritual hierarchy in locking Dalit caste in land‐based relations of dependency. The paper highlights the importance of expanding the definition of landlordism as the use of social power for accumulation by embedding it in the motives and values generated by the Hindu social order. While the new wave of literature focuses attention on global capital and commodity chains to understand differentiation of rural population and ruralities, the paper emphasizes the persistent significance of landholding provincial capital in shaping class/caste relations and rural politics and argues for a course correction in thinking about the processes of globalization and new forms of labour control and stresses the continuing significance of the agrarian question. [ABSTRACT FROM AUTHOR]

Research Summary: This paper develops a theoretical explanation for why economic inequality may affect individuals' decision to engage in entrepreneurial activities. We argue that inequality may have a positive impact on entrepreneurship because it triggers social comparison, thus motivating individuals to become entrepreneurs. Moreover, such effect is stronger for people in the middle economic status group than for those in the top or bottom groups, as middle economic status group has both the motivation and capability to take entrepreneurial actions. We use a sample of 3,879 Chinese households from 2010 to 2018 and merge them with county‐level variables to test our hypotheses. The results support our hypotheses and remain consistent across different model specifications, including models controlling for the potential endogeneity between inequality and entrepreneurship. Managerial Summary: The rising economic inequality around the world has drawn widespread attention. Although inequality may not be desired, the optimistic takeaway from this paper is that inequality might also have a positive side by motivating entrepreneurial activities, especially for people from the middle economic class. While exerting continuous efforts to reduce poverty, governments could also properly treat the entrepreneurial spirit inspired by inequality and guide it to encourage entrepreneurship. From a dynamic point of view, emerging economies, when progressing toward a more liberal and market‐oriented economy, might go through a period of time with increasing inequality. Thus different countries, due to their unique social and economic backgrounds, may not share one pareto optimal inequality ratio. [ABSTRACT FROM AUTHOR]

This paper investigates the role of municipal and provincial public social spending for local income inequality after taxes and transfers in Austria. We utilize a spatial multi‐level model, which allows us to analyze the contribution of three spatial scales (municipal, district, and provincial level) to municipal income inequality. Our analysis shows that the effect of public social spending on local Gini indices does not only differ across provinces but also across municipalities which indicates that the potential cushioning effect of social expenditure is highly localized. Further splitting total public social expenditure into three distinct categories (education, health, social protection) reveals that spending on social protection has the highest effect on local inequality across all provinces, while health spending does not exert a discernible influence in any province. The method and results presented in this paper are of international interest for policymakers and researchers who aim to investigate whether the same patterns hold true in other countries. [ABSTRACT FROM AUTHOR]

UK top income shares have varied hugely over the past two centuries, ranging from more than 30% to less than 7% of pre‐tax national income allocated to the top 1 percentile. We build a congruent dynamic linear regression model of the top 1% income share allowing for economic, political and social factors. Saturation estimation is used to model outliers and trend breaks, proxying underlying structural changes driving income inequality in the UK. We use the model to forecast the top 1% income share over the last 15 years, and compare to a range of forecast devices. Despite a well‐specified constant parameter model conditioning on significant explanatory variables, the best performing forecasts are obtained from a random walk and a smoothed random walk. These results are explained by the presence of shifts in the income share over the forecast period, resulting in forecasts from equilibrium correction models converging to the wrong equilibrium. Our best prediction for 2026 based on the most recent data from 2021 (a 5‐year ahead projection) is that the pre‐tax top 1% income share will remain at the most recent realized value of 12.7%, but there is a large degree of uncertainty, with a 95% confidence band ranging from 10% to 15.7%. This paper is part of the Economica 100 Series. Economica, the LSE "house journal" is now 100 years old. To commemorate this achievement, we are publishing 100 papers by former students, as well as current and former faculty. David Forbes Hendry received his MSc and PhD from the LSE. [ABSTRACT FROM AUTHOR]

The evolution of labour market and disposable income inequalities over recent decades in high‐income countries has generated intense interest in academia and the wider public. The extent to which there have been common trends, or diverging experiences, across a broad range of different countries, remains relatively understudied. The papers in this two‐part special issue seek to provide the bases for consistent comparisons across 17 North American and European countries. In this Introduction we provide background for the cross‐country project, which has been conducted in parallel to the wider IFS Deaton Review of Inequalities. In addition, we provide brief summaries of key trends and findings in the four English‐speaking countries and four Nordic countries, as well as a companion paper on gender pay gaps across all 17 countries. [ABSTRACT FROM AUTHOR]

Economic growth has been crucial in contributing to carbon dioxide (CO2) emissions from the Industrial Revolution, and it affects CO2 emissions heterogeneously with different income levels. Therefore, studying the role of economic growth on inequality in carbon emissions is imperative. This paper analyses the determinants of CO2 emissions inequality in the panel dataset of 37 Organisation for Economic Co-operation and Development (OECD) countries from 1990 to 2019. Age dependency, globalisation, and institutional quality reduce CO2 inequality in the OECD economies. However, gross domestic product per capita increases CO2 inequality. The results are robust to utilise different panel data estimation techniques. This paper provides the first evidence in the literature of determinants of CO2 inequality across the OECD countries. It is suggested that governments in the OECD economies offer a blueprint for a sustainable society of green economic growth. Other potential policy implications are also discussed. [ABSTRACT FROM AUTHOR]

This paper explores the economic, social, and technical dynamics affecting municipal solid waste (MSW) per capita in organisation for economic co‐operation and development (OECD) countries from 2003 to 2018. Static and dynamic panel data methods are followed for empirical analysis. According to the estimation results, there is an inverted‐U‐shaped relationship between economic growth and MSW. The turning point income level, where technological and structural effects occur, is calculated in the range of $20,000–$34,000. Human development and energy efficiency have mitigating effects on MSW. Energy efficiency and human development are critical for sustainable MSW management. Credit expansion has an increasing effect on MSW generation. Financial development draws attention as a negative indicator in sustainable waste management targets. All models confirm that income inequality has an increasing effect on MSW generation. In addition, poverty reduction is associated with an increase in MSW generation. Thus, income inequality and poverty reduction are a major constraint for sustainable MSW management. After all, the empirical findings of this paper can guide authorities in designing waste management policies. [ABSTRACT FROM AUTHOR]

This paper examines that how China's antidumping actions against other counties affect the returns to capital of involved industries. Using CSMAR from 1997 to 2015, we estimate the excess returns of a firm's equity by three different methods. Then combining with the Global Antidumping Database, we conduct an empirical analysis. Our empirical results show that China's antidumping investigation in specific industries promotes the return on equity of listed companies in the industry, meaning antidumping has positive impact on returns to capital. Antidumping promotes the marginal and average market value of firms' investment, thus showing excess returns on their equity, and then firms invest. As the investment stock increases, firms tend to be in equilibrium and excess returns fall. Furthermore, this paper conducts a series of heterogeneity analyses from the perspectives of capital intensity, capital specificity, and corporate ownership, and proves that antidumping measures can significantly increase the rate of return on capital in the industries involved. [ABSTRACT FROM AUTHOR]

This paper investigates the extent to which households in rural Thailand across the income distribution are able to mitigate income risks in the face of shocks. It uses especially high‐quality household income and consumption data spanning 64 Thai villages over 15 years. The paper identifies income shocks by village‐level variations during drought conditions. It finds that richer households are better able to mitigate income risk than poorer households, in contrast to some studies of the South Asian subcontinent. These possibilities for managing income risk are shown to be correlated with the type of contract the head of household is likely to be employed in, the share of salaries in total household income, the education level of the head, the relative youth of the heads of richer households, and location effects. [ABSTRACT FROM AUTHOR]

Consumption inequality may impede economic development and hinder the achievement of common prosperity. Using three waves of the China Family Panel Studies from 2014 to 2018, this paper investigated the impact of e‐commerce on consumption inequality, as measured by the Kakwani index. The results indicate that e‐commerce can reduce household consumption inequality. A mechanism analysis shows that e‐commerce can narrow household income inequality, increase the purchasing power of low‐income households, and promote the consumption of households with limited access to offline markets, thereby reducing the consumption gap. A heterogeneity analysis suggests that the positive role of e‐commerce in reducing consumption inequality can be more significant among vulnerable households, such as households with elderly members and less‐educated households. E‐commerce can have varying impacts on consumption inequality across different subcategories of household expenditure, with the greatest impact seen in entertainment and education expenditure. These findings provide new evidence for the role of e‐commerce in reducing consumption inequality in the digital economy, and the implications of this are discussed. [ABSTRACT FROM AUTHOR]

This paper addresses international inequality in multidimensional well‐being during the last one‐and‐a‐half centuries. Inequality fell in health and education since the late 1920s, due to the globalization of mass schooling and the diffusion of the health transition, but only dropped in population‐weighted terms from 1970 onward for political and civil liberties, as the emergence of authoritarian regimes increased its dispersion since the end of World War I. In terms of augmented human development inequality declined since 1900. These results are at odds with per capita income inequality that rose over time and only shrank from 1990 onward. The gap between the OECD and the Rest of the world accounted only partially for inequality in well‐being since the dispersion within developing regions became its main driver from the mid‐20th century onward. Countries in the middle and lower deciles of the world distribution achieved the largest relative gain over the past century. [ABSTRACT FROM AUTHOR]

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The paper argues that the dynamics of trade induced income convergence depend on the nature of bilateral trade between nations. To justify this argument, the paper presents a comprehensive approach that explicitly accounts for trade among OECD countries (north–north trade), trade between OECD and SSA countries (north–south trade) and trade among SSA countries (south–south trade). The approach also allows for the identification of the direct and indirect effects of bilateral trade on income convergence. The results show that bilateral trade among OECD countries accelerates income convergence both directly and indirectly. This result appears to be consistent with the new trade theories by Krugman, Journal of International Economics, 1979, 9, 469–479; Krugman, American Economic Review, 1980, 70, 950–959. and the intuitions of Heckscher, The effect of foreign trade on the distribution of income 1919, 1950, 1–32 and Ohlin, Interregional and international trade, 1933. The trade‐convergence relationship for OECD to SSA trade is the strongest both directly and indirectly. This is the empirical evidence that the nature of this bilateral trade, promotes one directional knowledge spillover from developed to developing countries, which enables developing countries to adopt new technologies and grow faster than their rich counterparts. However, bilateral trade among SSA countries does not have any significant effect on income convergence. [ABSTRACT FROM AUTHOR]

This paper analyzes how economic growth can be caused by changes in the income distribution. Persson and Tabellini (1994, The American Economic Review, 84, 600‐621) argue that productivity‐induced income inequality leads to lower growth since distortionary taxes increase and harm capital accumulation. However, this prediction is often challenged empirically. This paper distinguishes between capital income inequality and inequality induced by differences in labor productivity. Greater capital income inequality leads to lower labor tax rates, leading to higher growth. Using data for OECD countries, subsequent growth is found to be positively related to capital income inequality, and negatively related to labor income inequality, as originally conjectured. [ABSTRACT FROM AUTHOR]

The coronavirus (COVID‐19) pandemic brought economic recession that affected nations, businesses, and households globally. The severity of this global economic crisis is large and the impact has been asymmetric across socioeconomic groups. We examine the distributional effects of the COVID‐19 pandemic across household types using a specially‐designed model that combines macro (computable general equilibrium) and micro (heterogenous households) approaches. Computable general equilibrium models are able to capture behavioural changes in macroeconomic and sectoral variables but they often lack the rich distributional detail found in microsimulation models. In this paper, we address this limitation by incorporating 10,046 actual households into a computable general equilibrium model to capture the heterogeneity through which the pandemic may influence household behaviour. We find that the income effects are asymmetric across income groups leading to a slight increase in income inequality. The distributional effects are more progressive for non‐wage income sources and uniform for wage income. For younger cohorts, income changes are dominated by employment effects whereas income changes for older cohorts are dominated by changes in capital rentals and government transfers. Spatially, the income effects follow a similar pattern for city and non‐city dwellers. [ABSTRACT FROM AUTHOR]

Information on both wages and job quality is needed in order to understand the occupational dispersion of wellbeing. We analyse subjective wellbeing in a large UK sample to construct a measure of 'overall reward', the sum of wages and the value of job quality, in 90 different occupations. If only wages are included, then labour market inequality is underestimated: the dispersion of overall rewards is one‐third larger than the dispersion of wages. Our findings are similar, and stronger, in data on US workers. We find a positive correlation between job quality and wages in all specifications, both between individuals in the cross‐section and within individuals in panel data. The gender and ethnic gaps in the labour market are larger than those in wages alone, and the overall rewards to education on the labour market are underestimated by earnings differentials alone. This paper is part of the Economica 100 Series. Economica, the LSE "house journal" is now 100 years old. To commemorate this achievement, we are publishing 100 papers by former students, as well as current and former faculty. Maria Cotofan is a research Associate at the CEP. Andrew E. Clark obtained his mSc and PhD from the LSE and is a research Associate at the CEP. Richard layard is the Founder‐Director at the CEP and is the co‐Director of the Centre's programme on Community Wellbeing. [ABSTRACT FROM AUTHOR]

Climate change stands at the forefront of the worldwide agenda. Although its consequences are harmful to all humanity, some regions across the world remain more vulnerable than others. Sub‐Saharan Africa is one of the most suffering regions. In this paper, we investigate the climate change‐income inequality nexus in a panel of sub‐Saharan countries over the period 1990–2019. A greater emphasis is put on the potential transmission channels that drive this relationship. By using the recently developed method of moments quantile regression, we find that income inequality is exacerbated by the vulnerability to climate change. This relationship is still robust across all the quantiles with a greater effect at the highest quantile. The empirical findings reveal also the moderating role of agriculture, education, and gender through which the effect of climate change on income inequality is channeled. In light of the outcomes, the sub‐Saharan African region still needs appropriate combined mitigation and adaptation measures to efficiently combat the adverse effects of climate change. [ABSTRACT FROM AUTHOR]

This short paper presents an overview of the French policy mix towards labour market inequalities, consisting of a high minimum wage together with targeted payroll tax cuts around the minimum wage. It reviews the recent literature documenting the impact of that policy mix on employment and wage inequality. The main takeaways are that pre‐tax wage inequality has been increasing in France rather like it has in the UK and the US, while net wage inequality has decreased and then remained stable. The employment experience for the middle age group is also very close in France to the one in the UK and the US, while it differs markedly at young and older ages. The paper offers two more general thoughts on how to make progress in comparing policy options. First, most studies tend to give too much weight to tax and benefit reforms in being able to reduce inequality as they disregard incidence mechanisms, and fail to incorporate properly longer‐term effects of other policies on pre‐tax inequality. Second, the design of effective policy should always incorporate simplicity and salience. Failure to do so is likely to lead to little expected impact of such policies. [ABSTRACT FROM AUTHOR]

It is against this background that the African Development Bank, in collaboration with the United Nations Development Programme and The United Nations Economic Commission for Africa, organized its 2021 African Economic Conference from 2 to 4 December 2022 in Cabo Verde to address the timely issue of post-COVID-19 development financing in Africa. At the time this paper was finalized (31 July 2022), close to 12 million COVID-19 cases had been reported in Africa (Figure 1), more than 225,000 people had died from the coronavirus (Figure 2) and the total number of active cases in Africa was about 500,000 (Figure 3). Since 2020, Africa and the entire world have experienced socioeconomic challenges of alarming proportions owing to the COVID-19 pandemic. Many policy responses and stimulus packages designed seem insufficient to address the negative effect of COVID-19, mostly when access to financing was very low and the lending gap very high prior to the COVID-19 outbreak. [Extracted from the article]

The paper estimates the consequences for tax revenue and income distribution of the removal of the tax expenditures from Spanish Personal Income Tax (IRPF) in place during the 2013 tax year. The paper concludes that the removal of all the tax expenditures analyzed would increase revenue by €24,457 million (37.9% of the IRPF actual collection), and that the redistributive effect, measured by the Reynolds‐Smolensky index, would be reduced by 1.1%. The paper also analyzes sundry hypothetical scenarios involving the refunding to individuals of the tax collected through the removal of tax expenditures, and its distributive impact is quantified. Applications For Practice: As in other countries, Spanish personal income tax (IRPF) is fraught with tax expenditures, in the form of exemptions, deductions, allowances, special rates, tax credits, and so forth, the effects of which—in terms of effectivity, efficiency, and equity—are highly debated.The removal of most of these tax expenditures would result in a 37.9% increase in IRPF revenue in 2013 (€24,457 million), and a slight reduction of 1.1% in its redistributive effect, as measured by the Reynolds‐Smolensky index.It is possible to design tax or expenditure policies that compensate individuals for the increase in their tax liability resulting from the removal of tax expenditures, while maintaining or improving the redistributive effect of IRPF and reducing its efficiency costs.The implementation of an Earned Income Tax Credit in IRPF, financed by the removal of all tax expenditures, would have a highly progressive effect, and increases by about 70% of the redistributive effect of IRPF, before and after the elimination of tax expenditures. [ABSTRACT FROM AUTHOR]

Cooperatives serve a competitive yardstick role in markets dominated by market power such as monopsony or monopoly. This paper argues they can also serve a normative yardstick role in efforts to provide contextual social indicators for sustainability reporting that aims to instigate transformative change. The Statement on the Cooperative Identity, which includes cooperative values, principles, and purpose of associative economic organizing (ica.coop), can serve as a blueprint for the construction of social sustainability indicators. The paper then addresses two issues: one, it answers the question what should cooperatives measure and why; and two, it suggests the framework for transformative indicators informed by the purpose of cooperative organizing. In particular, cooperative enterprise model contributes to fair income distribution, promotes economic democracy, de‐commodifies necessities and fictitious commodities, and contributes to community development by investing in the real economy. These impact areas ought to be measured and disclosed. [ABSTRACT FROM AUTHOR]

To capture the mixed picture of trade‐induced human capital investment in both developing and developed countries, this paper develops a dynamic general equilibrium model with multinational enterprises (MNEs) and endogenous education investment decision and investigates the impacts of trade cost reduction on human capital accumulation and wage inequality. Illustrated with a numerical example, we show that with endogenous endowment structure, the set of active firm types is mutually determined by trade cost and the discrepancy in the incentives for education attainment between countries. In addition, the exact impacts of trade are determined by changes in the production patterns of firms. When the reduction in trade cost expands the scale of vertical MNEs with headquarters in developed countries, education investment increases in both developing and developed countries. We also show that the distributional impacts of production offshoring are mitigated by human capital accumulation. The conclusions in this paper highlight the importance of education policies in complementing trade policies, as well as the important role of MNEs in shaping the world income and endowments distribution. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of financial openness on financial sector development and income inequality. We use the de jure and de facto measures of financial openness across 78 countries from 1980 to 2019. By employing a system generalized method of moments (GMM) with 5‐year averaged data and a novel push and pull modeling framework, we obtain three key results. First, the de jure measure of financial openness exacerbates income inequality and is sensitive to banking crises and conflict intensity. Second, the de facto measure spurs stock value traded in emerging market economies (EMEs) and declines domestic credit in Africa. Third, the interaction between de facto measures with schooling and governance factors affects financial sector development and income inequality. We highlighted that the mere usage of the de jure measure and their interaction is incorrect. The key implication is that valuable information about the real impact of openness can be obtained from the de facto measures and their interaction with favorable macroeconomic fundamentals, governance factors, and adverse nonpolicy factors. [ABSTRACT FROM AUTHOR]

The dynamics of economic inequality and its relationship with economic growth in the preindustrial world is increasingly attracting the attention of both economists and economic historians. In this paper, we tackle this theme by introducing new estimates of the labor share in five major European countries (England, France, Holland, Spain, and Portugal) for the period 1250–1850. Our estimates are constructed using an innovative method based on the conversion of real wages in 2011 PPP $. Overall, we find a complex pattern of evolution of the labor share with major fluctuations. Furthermore, using the inequality possibility frontier (IPF) framework, our results suggest that preindustrial Europe was characterized by a negative relationship between the extraction ratio and GDP. [ABSTRACT FROM AUTHOR]

In October 2020, the Australian Parliament legislated what appear to be significant changes in HECS–HELP prices, the tuition charges levied on domestic undergraduate students. Through this policy change, the Government aims to influence student choices in order to help deliver the skill changes presumed to be required for the economy's post‐COVID make‐up. This paper examines, in conceptual and empirical terms, a key aspect of the motivation for the reform, the true meaning of prices in the HECS–HELP world of an income‐contingent loan (ICL). We explain the conceptual basis of ICL charges and, with 2016 Census data, illustrate the meaning of the price changes between disciplines, by gender, and for a suite of expected future graduate lifetime income distributions. Our analysis points strongly to the conclusion that the true price changes are far less than they appear to be, highlighting the potential of there being quite muted consequences for student discipline choices. The paper examines the true meaning of the October 2020 legislated price changes for Australian graduates. We find that in the presence of the HECS–HELP income‐contingent loan, the true price changes are far less than they appear to be, pointing to muted resulting effects on student discipline choices. [ABSTRACT FROM AUTHOR]

This paper analyzes trends in the income, net worth, and homeownership of non‐Hispanic African‐Americans and Hispanics relative to non‐Hispanic whites in the United States from 1989 to 2016 and the reasons for those trends using data from the Survey of Consumer Finances. The wealth gap between African‐American and white families was much the same in 2007 as in 1989 but it lessened considerably for Hispanics. The net worth of both minorities declined sharply relative to that of non‐Hispanic whites from 2007 to 2016 and that decline was due largely to the lower rate of return on wealth of these two groups during the 2007–2010 period and largely due to the larger dissaving of these two groups during the 2010–2016 period. The paper also finds that the wealth gap is much smaller if net worth is augmented by pension wealth and especially by Social Security wealth. [ABSTRACT FROM AUTHOR]

The purpose of this paper is twofold. First, it introduces a novel inequality concept called income composition inequality, which describes how the composition of income in two sources, such as capital and labor income, varies across the income distribution. Second, it constructs an indicator for its measurement. This paper argues that the study of income composition inequality allows for: (i) a novel political economy analysis of the evolution of economic systems; and (ii) the technical assessment of the relationship between the functional and personal distributions of income. Following an empirical application, this paper discusses possible avenues for future research on the matter, ranging from development issues to public finance. [ABSTRACT FROM AUTHOR]

In modern knowledge‐based societies human capital is the single most important determinant of regional inequalities in productivity and standards of living. Using a newly constructed data set that allows the analysis of educational attainments at different levels of geography, this paper evaluates spatial inequalities and the degree of convergence in the distribution of human capital across areas in England and Wales during the second decade of the 21st century. Our results show this was a period characterised by a large increase in educational attainment and skill intensity. However, the growth in skill intensity was far from uniform across space. In particular, we find strong evidence of both absolute σ‐divergence and β‐convergence in the distribution of skills. Thus, even if low‐skill areas grew on average more than other areas with higher skill intensity at the start of the period, the stochastic dominance analyses provide strong evidence of an unambiguous increase in absolute inequalities so that by end of the decade the skill gap between low‐ and high‐skill areas had significantly widened. We present new spatial and aspatial evidence that sheds light on those inequalities and the changes in the spatial configuration of human capital over the last decade. Despite the implementation of policies aimed at reducing regional inequalities, many low skill areas struggled to attract talent so that the gap with most skilled areas widened over that period likely contributing to the persistence of the well‐documented large spatial economic inequalities in this country. [ABSTRACT FROM AUTHOR]

In this paper, we provide novel findings regarding the distributional effects of the global financial and economic crisis and how redistribution operated during this time, using detailed data for Austria. We construct distributional national accounts for the period 2004–2016 by combining survey data, tabulated tax data, and detailed national accounts data. The comprehensive data set allows us to analyze the distribution of macroeconomic income growth across the income distribution and to explore the evolution of income inequality over time. Our results suggest that as the distribution of growth changed over time, this had considerable repercussions for inequality, which started to decline at the very beginning of the economic and financial crisis, but increased again after 2012. We find that capital income largely determined both the level and the dynamics of income inequality. Government spending was found to play a key role for redistributive effects across the income distribution. In particular, in‐kind transfers redistributed pre‐tax income to a large extent. Our results show further that individuals with lower educational levels and younger individuals faced negative growth in pre‐tax income over the years and also benefited considerably from redistribution. [ABSTRACT FROM AUTHOR]

This paper investigates the relationship between energy consumption and income inequality in an unbalanced panel of 144 countries over the period 1990–2018. Using fixed effect and instrumental variable panel methods and controlling for other determinants of inequality, I find a large and strong negative relationship between energy use and income inequality. The paper also demonstrates that results hold for models which divide the total sample into subsamples of economic blocs and regions. In addition, greater energy use reduces the income share of the top 10% and increases the share of the bottom 40%. [ABSTRACT FROM AUTHOR]

This paper establishes that the worldwide distribution of political instability has its deep historical roots in genetic diversity, predetermined over the prehistoric course of the exodus of Homo sapiens from East Africa tens of thousands of years ago. It proposes that the relationship between prehistorically determined genetic diversity and contemporary political instability follows a U‐shaped pattern. More specifically, genetic diversity at first reduces the persistence of political instability by increasing the opportunity cost of engaging in riots and revolts. However, genetically fragmented societies tend to suffer from interpersonal mistrust and the under‐provision of public goods, which plausibly undermine the establishment of politically stable regimes. Using an ancestry‐adjusted index of predicted genetic diversity, this paper consistently finds precise estimates that genetic diversity imparts a U‐shaped influence on different measures of political instability and the probability of observing the occurrence of riots and revolts across 141 countries. Furthermore, the contribution of genetic diversity to political instability is at least partially mediated through income/productivity levels, the provision of public goods, income inequality and social trust. [ABSTRACT FROM AUTHOR]

If large firms employ relatively more educated workers, will an increase in market concentration increase income inequality by raising the relative demand for skill? I use Swedish employer–employee data from 1997–2016 and find a strong correlation between firm size and the share of college‐educated ('skilled') workers. An increase in a sector's market concentration is correlated with a higher skilled wage premium and higher relative employment of skilled workers. This is due mainly to the reallocation of workers across firms. I demonstrate how these findings can be explained by a model of heterogeneous firms where productivity and skill intensity are positively correlated. This paper is part of the Economica 100 Series. Economica, the LSE "house journal" is now 100 years old. To commemorate this achievement, we are publishing 100 papers by former students, as well as current and former faculty. Anders Akerman completed his BSc and MSc at the LSE. [ABSTRACT FROM AUTHOR]

This study examines the socioeconomic impact of Special Economic Zones (SEZs) in Cambodia--a prominent place-based policy established in 2005. The paper employs a database on existing and future SEZs in Cambodia with matched household surveys at the district level and documents stylized facts on SEZs in a low-income country setting. To identify the causal effects of the SEZ program, the paper (i) constructs an alternative control group including future SEZ program participants and districts adjacent to SEZ hosts; and (ii) employs a propensity score weighting technique. The study finds that entry of SEZs increases employment and leads to a decline in income inequality at a district level. Gains in female employment is the key channel explaining rising employment rates. The paper also finds that school drop-out rates are higher in districts with clusters of multiple SEZs. [ABSTRACT FROM AUTHOR]

Applying panel threshold regression technics along with alternative econometric investigation on a panel database of 48 sub‐Saharan African (SSA) countries over the period 2000–2012, this paper analyzes the structure of housing finance in SSA countries and mainly verifies if there is a threshold effect on shared prosperity. Independently of the method used, our findings offer strong evidence of an inverted U‐shaped relationship between housing finance and inequality. The current level of development of housing finance in SSA, which is at its very early stage, is not yet an effective tool for reducing economic inequality; however, beyond a given threshold, housing finance becomes effective in reducing inequality. Indeed, higher values of housing finance depth above a certain threshold of 6.35% reduce inequality, whereas values below 6.35% and very high values have no significant impact. In addition, there is a slightly positive relationship between housing finance and labor productivity growth in SSA. Results also show that the way housing finance impact inequality is highly dependent on their ability to implement effective crisis fight policies. Controlling for countries' income levels, legal origin, and regional proximity revealed relative benchmarking, typology, and characteristics of SSA housing finance. These findings suggest some policies to stimulate the development of housing finance in SSA. As a bonus, this paper also highlights several other pillars that can be used to support shared prosperity in SSA. [ABSTRACT FROM AUTHOR]

This paper examines the trade–peace nexus in Africa and ascertains how poverty and inequality tilt the relationship in the eight regional (economic) blocs in Africa, viz. the Arab Maghreb Union (UMA), the Common Market for Eastern and Southern Africa (COMESA), the Community of Sahel–Saharan States (CEN–SAD), the East African Community (EAC), the Economic Community of Central African States (ECCAS), the Economic Community of West African States (ECOWAS), the Intergovernmental Authority on Development (IGAD) and the Southern African Development Community (SADC), from 1998 to 2020 using the Driscoll–Kraay estimate. The study contributes to the literature by disaggregating the peace effect of trade in Africa by the regional (economic) blocs to allow for in‐depth and context‐specific analysis. The paper also expands the scope of existing studies by examining the direct effect of poverty and inequality on peace in addition to the indirect effect that is revealed through their interactions with trade integrations. The findings reveal that trade promotes peace in Africa, while wide income inequality and a large poverty gap increase the likelihood of conflict. The interaction of poverty and inequality with trade integration shows that while the poverty level does not improve the effect of trade on peace, inequality reduces the impact of trade on peace. The study concludes that poverty and inequality play significant roles in the trade–peace nexus in Africa. Policy recommendations are discussed. [ABSTRACT FROM AUTHOR]

The Asia–Pacific region's rapid growth and poverty reduction in recent decades have been accompanied by rising income and wealth inequality. Technological progress, globalization, deregulation and market‐oriented reform, and financialization have generated many new opportunities, but rewarded capital more than labor, benefited skilled workers more than the unskilled, widened spatial inequality, and produced a growing number of the superrich. For some countries, population aging has also contributed to rising inequality. The present paper provides an update on recent trends of income and wealth inequality in the Asia–Pacific region, examines causes behind rising inequality, and discusses policy actions needed to tackle inequality. It also assesses how the COVID‐19 has likely worsened inequality in the region. [ABSTRACT FROM AUTHOR]

The social geography of cities is argued to be changing globally; rising economic inequality is associated with increasing segregation. Yet, income inequality has been predominantly mobilised through national and regional imaginaries. In cities, a number of factors such as the normative policy motivation to intervene in 'disadvantaged' neighbourhoods, have led to (concentrations of) poverty becoming prioritised in empirical studies of household income. This paper addresses a gap in understanding the relationship between local income inequality and the segregation of high‐income households at the urban and neighbourhood scales in England and Wales. The results highlight that wealthier cities and districts (Cambridge, Winchester, and Rushcliffe in the Nottingham conurbation) have higher income inequality (Gini), but are less segregated (Index of Dissimilarity). Lower average income cities tend to be more segregated, due to self‐segregation of high‐income households into 'pockets of affluence.' These results confirm that high‐income households are the most segregated group in our sample, consistent with trends in global urban segregation patterns. The research also highlights just how prevalent low income is in urban neighbourhoods, making the case for high income as the designated minority population in segregation studies. In our detailed case study of Nottingham, income homogeneity is typical of areas with high deprivation. Neighbourhoods with a high Gini coefficient could be described as mixed income: the Gini is raised by the presence of high‐income households in urban neighbourhoods. We argue that the Gini therefore offers potential as an indicator of social mix in urban studies. These results are based on an experimental household income dataset released by the Office of National Statistics, with analysis of all core cities in England and Wales, alongside Derby, Leicester, Cambridge, Southampton, and Winchester, followed by a detailed case study of Nottingham (UK) and its extended suburban boundary. [ABSTRACT FROM AUTHOR]

We provide a comprehensive analysis of income inequality and income dynamics for Germany over the last two decades. Combining personal income tax and social security data allows us--for the first time--to offer a complete picture of the distribution of annual earnings in Germany. We find that cross-sectional inequality rose until 2009 for men and women. After the Great Recession, inequality continued to rise at a slower rate for men and fell slightly for women due to compression at the lower tail. We further document substantial gender differences in average earnings and inequality over the life cycle. While for men earnings rise and inequality falls as they grow older, many women reduce working hours when starting a family such that average earnings fall and inequality increases. Men's earnings changes are on average smaller than women's but are substantially more affected by the business cycle. During the Great Recession, men's earnings losses become magnified and gains are attenuated. Apart from recession years, earnings changes are significantly right-skewed reflecting the good overall state of the German labor market and increasing labor supply. In the second part of the paper, we study the distribution of total income including incomes of self-employed, business owners, and landlords. We find that total inequality increased significantly more than earnings inequality. Regarding income dynamics, entrepreneurs' income changes are more dispersed, less skewed, less leptokurtic, and less dependent on average past income than workers' income changes. Finally, we find that top income earners have become less likely to fall out of the top 1 and 0.1%. [ABSTRACT FROM AUTHOR]

The Global Repository of Income Dynamics (GRID) is a new open-access, crosscountry database that contains a wide range of micro statistics on income inequality, dynamics, and mobility. It has four key characteristics: it is built on micro panel data drawn from administrative records; it fully exploits the longitudinal dimension of the underlying data sets; it offers granular descriptions of income inequality and income dynamics for finely defined subpopulations; and it is designed from the ground up with the goals of harmonization and cross-country comparability. This paper introduces the database and presents a set of global trends in income inequality and income dynamics across the 13 countries that are currently in GRID. Our results are based on the statistics created for GRID by the 13 country teams who also contributed to this special issue with individual articles. [ABSTRACT FROM AUTHOR]

In this paper, we present an agent‐based model in which taxpayers 'live' in a network and care about their social reputation. Individuals decide whether to pay or to evade taxes considering the expected economic net benefit and the reputational cost from tax evasion. Individuals differ in income and in the weight they attach to social reputation, which is updated by assessing the opinions shared in their reference group. The reference group contains individuals irrespective of their income (integrated society) or it is made up of peers belonging to the same income group (segregated society). We simulate the model in the two alternative settings to find the frequency distribution of taxpayers in a dataset of random networks. The results indicate that, in an integrated society, network conformity is reached and all individuals either evade or pay their taxes. Conversely, a segregated society might generate obstacles to the diffusion of opinions and, as a result, tax evasion and tax compliance might coexist. Lastly, we consider the effects of a social media campaign starring a celebrity financed by a fiscal authority to increase overall tax compliance by exploiting the diffusion dynamics in the network. We show that such a policy is more effective if the diffusion of opinions is not hindered by social segregation. In an integrated society, especially if income inequality is low, a celebrity's endorsement of tax compliance might nudge widespread socially responsible tax behaviour. [ABSTRACT FROM AUTHOR]

All activities that have led to this special series were jointly organized by the Institute for Advanced Sustainability Studies (IASS) in Potsdam, Germany and the Berlin-Brandenburg Academy of Sciences and Humanities in Berlin, Germany. We would also like to thank Karen Lowrie, Managing Editor of I Risk Analysis i , and Terje Aven, Area Editor Policy of I Risk Analysis i , for their continued support. What do global climate change, cybercrime, pandemics, and the loss of societal cohesion have in common?. [Extracted from the article]

The emergence of the United Nations' Sustainable Development Goals has instigated a transformative phase in policy formulation, emphasizing the multifaceted approach required to attain these objectives. Central to this pursuit is the management of diverse goals and their intricate interactions. This paper rigorously examines the pivotal role of institutional transparency in the nexus between energy transition and income inequality across 127 countries from 2012 to 2020, within the framework of the Sustainable Development Goals. The estimated results from the non‐balanced panel threshold model suggest the existence of a threshold effect of institutional transparency in the impact of energy transition on income inequality. On the whole, the process of energy transition has had a detrimental effect on income inequality, with institutional transparency serving to moderate it. When institutional transparency falls within the first regime (lnCPI ≤3.3322), the second regime (3.3322 < lnCPI <4.3041), and the third regime (lnCPI >4.3041), a 1% increase in the proportion of renewable energy consumption results in average increases in disposable income inequality of 0.0165%, 0.0143%, and 0.0128%, respectively. This suggests that institutional transparency has a positive moderating effect on the detrimental impact of energy transition on disposable income inequality. However, this result does not hold true for market income inequality. Additionally, there is an "inverted U‐shaped" relationship between economic growth and income inequality, indicating the negative impact of energy transition on income inequality would be offset by its contribution to economic growth. [ABSTRACT FROM AUTHOR]

Innovation can lead to wage inequalities through different channels. This paper explores this relationship, focusing on the direct and spillover (indirect) effects of these channels on personal wage inequalities in Brazilian regions. Product and process innovation are measured by patents and the acquisition of foreign technology through imports of capital goods respectively. Based on data that covers 482 regions from 2003 to 2014, we use the Spatial Durbin Model with spatial fixed effects to control spatial dependence and heterogeneity across regions. The results point to a positive association between our measures of innovation and wage inequalities. However, as we found a non‐linear relationship between imports of capital goods and wage inequality, an increase in imports of capital goods may reduce wage inequality. Other variables may also cause inequality to fall, such as the share of the population with a higher education degree and social skills. Drivers behind an increase in inequality are female participation in the workforce and the level of GDP per capita. [ABSTRACT FROM AUTHOR]