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Experimental studies of social dilemmas have shown that while the existence of a sanctioning institution improves cooperation within groups, it also has a detrimental impact on group earnings in the short-run. Could the introduction of pre-play threats to punish have enough of a beneficial impact on cooperation, while not incurring the cost associated with actual punishment, so that they increase overall welfare ? We report an experiment in which players can issue non-binding threats to punish others based on their contribution levels to a public good. After observing others' actual contributions, they choose their actual punishment level. We find that threats increase the level of contributions significantly. Efficiency is improved, but only in the long run. However, the possibility of sanctioning differences between threatened and actual punishment leads to lower threats, cooperation and welfare, restoring them to levels equal to or below the levels attained in the absence of threats.

Zwei wesentliche Perspektiven, Arbeitslosigkeit zu untersuchen, sind die der Gerechtigkeit und die der Effizienz. Unverschuldete Arbeitslosigkeit wird als ungerecht empfunden. Zugleich wird häufig argumentiert, dass Arbeitslosigkeit zu gesellschaftlichen Wohlfahrtseinbußen führt, da Arbeit als Produktionsfaktor in erheblichen Umfang nicht genutzt wird. Dieses zweite Argument ist unmittelbar ein Effizienzargument. Beide Argumente führen möglicherweise zu ganz unterschiedlichen Einschätzungen davon, (i) warum Arbeitslosigkeit überhaupt ein Problem ist und (ii) von welchen Grundlagen man ausgehen sollte, um diesem Problem zu begegnen. Wir werden diese Fragen zu beantworten suchen, indem wir sie aus den beiden genannten Perspektiven betrachten. (Abschnitt 1). Die Perspektive der Effizienz ist die der Neuen Politischen Ökonomie (Public Choice), die auf dem Menschenbild oder Modell des Homo oeconomicus beruht (Abschnitt 2). Dieser werden wir in Abschnitt 3 eine andere gegenüberstellen, deren Basis das Menschenbild des Homo politicus ist. Den Homo politicus verstehen wir als einen Menschen, der in seinem Handeln vom Interesse an der Errichtung und Erhaltung eines gerechten politischen Gemeinwesens geleitet ist. Im Abschnitt 4 wenden wir uns dem Thema der Gerechtigkeit zu, indem wir die Konzepte der Ordnungsgerechtigkeit und der Verteilungsgerechtigkeit darstellen und diskutieren. Die Beziehung zwischen Gerechtigkeit und Marktwirtschaft wird in Abschnitt 5 untersucht. Damit sind die Voraussetzungen geschaffen, um in Abschnitt 6 das Thema Marktwirtschaft und Arbeit und in Abschnitt 7 die Beziehung zwischen politischer Verantwortung und Arbeit.zu behandeln. Schließlich untersuchen wir in Abschnitt 8 wirtschaftspolitische Perspektiven für den Arbeitsmarkt am Beispiel von Hartz IV. In Abschnitt 9 erläutern wir, dass die Idee der Ordunungsgerechtigkeit als Orientierung in der arbeitsmarktpolitischen Debatte verwendet werden kann.

In more and more situations, artificially intelligent algorithms have to model humans’ (social) preferences on whose behalf they increasingly make decisions. They can learn these preferences through the repeated observation of human behavior in social encounters. In such a context, do individuals adjust the selfishness or prosociality of their behavior when it is common knowledge that their actions produce various externalities through the training of an algorithm? In an online experiment, we let participants’ choices in dictator games train an algorithm. Thereby, they create an externality on future decision making of an intelligent system that affects future participants. We show that individuals who are aware of the consequences of their training on the pay- offs of a future generation behave more prosocially, but only when they bear the risk of being harmed themselves by future algorithmic choices. In that case, the externality of artificially intelligence training induces a significantly higher share of egalitarian decisions in the present.

Envy is an unpleasant emotion. If individuals anticipate that comparing their payoff with the (potentially higher) payoff of others will make them envious, they may want to actively avoid information about other people’s payoffs. Given the opportunity to reduce another person’s payoff, an individual’s envy may trigger behavior that is detrimental to welfare. In this case, if individuals anticipate that they will react in a welfare-reducing way, they may also avoid information about other people’s payoffs from the outset. We investigated these two hypotheses using three experiments. We found that 13% of our potentially envious subjects avoided information when they did not have the opportunity to reduce another participant’s payoff. Psychological scales do not explain this behavior. We also found that voluntarily uninformed subjects did neither deduct less of the payoff nor less frequently than subjects who could not avoid the information., CEPA Discussion Papers, 17

This paper investigates the time caseworkers spend supporting long-term foster care and adoption placements. Undertaken in Australia through collaboration between university and non-government agency researchers, the ‘Cost of Support Study’ tracked the hours that caseworkers spent supporting twenty-seven children and their carers over a nine month period. 3 The placements were part of a ‘Find-A-Family’ program for ‘hard to place children’, many of whom had previously experienced multiple placement breakdowns. The program has a history of 78% stability on the first placement (over the young person's time in the program) and 93% by the second, with the type of support provided by this accredited agency's program detailed here. The weekly worker diaries reveal an average of 3 hours 32 minutes of worker time per week per placement; however wide variation is apparent in the time given to each placement, and depends on the characteristics of the child involved. Further, the resources required to support each placement are found by multiplying worker hours by the hourly cost per worker, using New South Wales government costings. The paper contributes to the important debate regarding the link between worker time and stability in care, by deepening our understanding of the costs involved in providing high quality support and supervision of casework.

We propose a new approach to multidimensional poverty measurement. To aggregate and weight the different dimensions of poverty, we rely on the preferences of the concerned individuals rather than on an arbitrary weighting scheme selected by the analyst. We provide an axiomatic characterization of an approach in which multidimensional poverty measures add up individual indices of poverty based on their multidimensional outcomes and their preferences. We discuss two families of these individual indices of poverty: quantity metrics and money metrics. Members of the first family evaluate individual poverty by the fraction of the poverty line vector to which the individual is indifferent. The second family considers the ratio between the income to which the individual is indifferent, for some fixed price vector, and the money value of the poverty line vector. We illustrate our approach with Russian survey data between 1995 and 2005. We find that, compared to standard poverty indices, our preference-sensitive indices lead to considerable differences in the identification of the poor.

私たちは、本研究ノートで、1980年代に考察されるようになった心理ゲームをとりあげる。とりわけ、Matthew Rabin, “Incorporating Fairness into Game Theory and Economics,” American Economic Review, Vol. 83, No. 5, 1993, pp. 1281-1302を中心に検討する。伝統的ゲームでは、プレーヤーは、主として、物質的利得に動機付けられて行動するものとして分析されている。しかし、心理ゲームでは、伝統的ゲームに情緒的心理過程を組み込むことで、プレーヤーは、物質的利得（当該プレーヤーが相手プレーヤーの行動に対していだく信念）だけではなく、心理的利得（当該プレーヤーが相手プレーヤーの情緒的心理に対していだく信念）にも大きく依存すると考える。 Rabin（1993）は、心理的動機として公正概念を検討している。 • 伝統的ゲームに、心理的動機としての公正概念を反映させることを考えている。 － 人々は、自分を助けてくれる人を助けたいと思っている。 － 人々は、自分を傷つける人を罰したいと思っている。 さらに、心理的動機をモデルに反映させた結果は、ナッシュ均衡とは異なる新たな均衡が生じることを明らかにしている。 • 心理的動機をモデルに反映させた結果は、公正均衡（fairness equilibria）を生じることを明らかにしている。 － ある人が他のある人の物質的利得を最大化する相互最大（mutual-max）の結果は、公正均衡である可能性がある。 － ある人が他のある人の物質的利得を最小化する相互最小（mutual-min）の結果は、公正均衡である可能性がある。 － あらゆる相互最大のナッシュ均衡、あるいは、相互最小のナッシュ均衡は、公正均衡である可能性がある。 － 特に、自分が獲得する、あるいは、犠牲にする利得が小さいならば、相互最大の結果あるいは相互最小の結果の集合は、およそ、公正均衡である。 － また、自分が獲得する、あるいは、犠牲にする利得が大きいならば、ナッシュ均衡の集合は、およそ、公正均衡である。 本研究ノートでの私たちの視点は、あくまで、内発的動機付けのクラウディング・アウトを説明する有力な理論として、心理ゲームを検討することである。, 日本学術振興会の学術研究助成基金助成金の資金援助（課題番号：26380462）に深く感謝いたします。本研究ノートは、研究プロジェクトの遂行にあたり開催された研究会の報告資料（平成26年9月11日（木）於 広島大学）に加筆・修正したものである。

赤面は嘘を暴露し、次の瞬間、言いしれぬ決まり悪さをもたらす。しかしながら、信頼が求められている状況で、「赤面する人」というレッテルは大きな優位性をもたらすかもしれない。本稿では、協働行動を事前に要求する問題（いわゆる、プリコミットメント問題）の解決を支援する装置として、個人的嗜好が極めて有効に機能するモデルを展開する。ここで示される嗜好は、単純に、「気持ちが晴れない」という理由のためだけで、効用関数の中で有用な役割を果たす。個人的嗜好を内生変数とするこのモデルは、伝統的合理的選択モデルの仮定とは大いに異なるものである。, 研究プロジェクト「外在的報酬の内発的動機付けに対する有害効果」（課題番号：26380462）への日本学術振興会の学術研究助成基金助成金の資金援助に深く感謝いたします。本レビューは、同研究プロジェクトの遂行にあたりなされた、一連の文献レビューの一環であり、主として、Robert H. Frank, “If Homo Economicus Could Choose His Own Utility Function, Would He Want One with a Conscience?” American Economic Review, Vol.77, No.4, 1987, pp. 593-604をレビューしたものである。

With Big Data, decisions made by machine learning algorithms depend on training data generated by many individuals. In an experiment, we identify the effect of varying individual responsibility for the moral choices of an artificially intelligent algorithm. Across treatments, we manipulated the sources of training data and thus the impact of each individual's decisions on the algorithm. Diffusing such individual pivotality for algorithmic choices increased the share of selfish decisions and weakened revealed prosocial preferences. This does not result from a change in the structure of incentives. Rather, our results show that Big Data offers an excuse for selfish behavior through lower responsibility for one's and others' fate.

Using new data from a three-wave panel survey administered in Germany between May 2020 and May 2021, this paper studies the impact of a negative shock affecting every strata of the population, such as the development of COVID-19, on preferences for redistribution. Exploiting the plausibly exogenous change in severity of the infection rate at the county level, we show that, contrary to some theoretical expectations, the worse the crisis, the lower the support for redistribution of our respondents. We provide further suggestive evidence that this is not driven by a decrease in inequality aversion, but this might be the result of a decrease in trust in the institutions who are in charge of redistributive policies. published

The paper reviews the macroeconomic data describing the British economy from 1760 to 1913 and shows that it passed through a two stage evolution of inequality. In the first half of the nineteenth century, the real wage stagnated while output per worker expanded. The profit rate doubled and the share of profits in national income expanded at the expense of labour and land. After the middle of the nineteenth century, real wages began to grow in line with productivity, and the profit rate and factor shares stabilized. An integrated model of growth and distribution is developed to explain these trends. The model includes an aggregate production function that explains the distribution of income, while a savings function in which savings depended on property income governs accumulation. Simulations with the model show that technical progress was the prime mover behind the industrial revolution. Capital accumulation was a necessary complement. The surge in inequality was intrinsic to the growth process. Technical change increased the demand for capital and raised the profit rate and capital`s share. The rise in profits, in turn, sustained the industrial revolution by financing the necessary capital accumulation. After the middle of the nineteenth century, accumulation had caught up with the requirements of technology and wages rose in line with productivity.

The empirical literature on the economics of happiness has grown rapidly, and much has been learned about the determinants of subjective well-being. Less attention has been paid to its normative implications. Taking China as a case study, this paper first summarises empirical results on the determinants of subjective well-being and then considers whether that evidence can be used for social evaluation. Different criteria for social evaluation give very different answers: on the one hand, real income per capita and the human development index have risen rapidly in recent years but, on the other hand, subjective well-being appears not to have risen at all. Ultimately a value judgement is required: arguments are presented for and against including subjective well-being, either alone or with other criteria, in the social welfare function.

We propose to measure inequality of well-being with a multidimensional generalization of the Gini coefficient. We derive two inequality indices from their underlying social evaluation functions. These functions are conceived as a double aggregation functions: one across the dimensions of well-being, and another across the individuals. They differ only with respect to the sequencing of aggregations. We argue that the sequencing that does not exclude the Gini index to be sensitive to the correlation between the dimensions is more attractive. We illustrate both Gini indices using Russian household data on three dimensions of well-being: expenditure, health and education.

This paper examines the distributional implications of monetary policy, either standard, non-standard or both, on income inequality in 10 Euro Area countries over the period 2000-2015. We use three different indicators of income inequality in a Panel VAR setting in order to estimate IRFs of inequality to a monetary policy shock. The identification of monetary shocks follows a one-step procedure and relies only on country-specific determinants of income distribution. Results suggest that: (i) the distributional effects of ECB’s monetary policy have been modest and (ii) mainly driven in times of conventional monetary policy measures, especially in countries with a high level of market inequalities, while, overall, (iii) standard and non-standard monetary policies do not significantly differ in terms of impact on income inequality. Results are robust to alternative data sources either for income distribution or for non-standard monetary policies.

Various markets ban or heavily restrict monetary transfers. This is often motivated by moral concerns. However, it appears to be disputable whether the observed restrictions on transfers are the appropriate market design answer to these concerns. Instead of exogenously restricting transfers on a matching market, we introduce a desideratum based on fairness objectives and study its market design implications. The desideratum we concentrate on is discriminationfreeness, i.e. one’s access to certain resources is independent of one’s wealth endowment. A key assumption in our model is that preferences are not quasilinear but wealth has an impact on the willingness to pay. We show that matchings without transfers based on ordinal object rankings are at the efficient frontier of discrimination-free social choice functions. Implementable social choice functions are discrimination-free if and only if an agent’s object assignment only depends on ordinal object rankings and her money assignment is constant. If money can be used outside the market designer’s control even externality-freeness is needed: an agent’s object assignment has to be independent of other agents’ types. We discuss several applications in the context of discrimination-freeness including compensation for kidney donors.

This paper uses population register data on inheritances and wealth in Sweden to estimate the causal impact of inheritances on wealth inequality. We find that inheritances reduce wealth inequality, as measured by the Gini coefficient or top wealth shares, but that they increase absolute dispersion. This duality in effects stems from the fact that even though richer heirs inherit larger amounts, the relative importance of the inheritance is larger for less wealthy heirs, who inherit more relative to their pre-inheritance wealth. This is in part driven by the fact that heirs do not inherit debts, which makes the distribution of inheritances more equal than the distribution of wealth among the heirs. Behavioral adjustments seem to mitigate the equalizing effect of inheritances, possibly through higher consumption among the poorer heirs. Inheritance taxation counteracts the equalizing inheritance effect, but redistribution of inheritance tax revenues can reverse this result and make the inheritance tax equalizing. Finally, we also find that inheritances increase intragenerational wealth mobility, but the effect is short-lived.

We study the fair allocation of a one-dimensional and perfectly divisible good when individuals have other-regarding preferences. Assuming no legitimate claims and purely ordinal preferences, how should society measure social welfare so as to satisfy basic principles of efficiency and fairness? We define the egalitarian equivalent as the size of the egalitarian allocation which leaves the individual indifferent to the current allocation. In two simple models of average and positional externalities, we characterize the class of social preferences which give full priority to the individual with the lowest egalitarian equivalent in the economy.

“Multigenerational mobility” refers to the associations in socioeconomic status across three or more generations. This article begins by summarizing the longstanding but recently growing empirical literature on multigenerational mobility. It then discusses multiple theoretical interpretations of the empirical patterns, including the one recently proposed in Gregory Clark’s book The Son Also Rises.

Purpose Understanding the linkages between poverty and inequality is vital to any sustainable development and poverty reduction strategies. In Ghana, while poverty has reduced significantly over the years, inequality has increased. The purpose of this paper is to examine the linkages between inequality in household expenditure components and overall inequality and poverty in Ghana. Design/methodology/approach Using microdata from the sixth round of the Ghana Living Standards Survey (GLSS 6) conducted in 2012/2013, marginal effects and elasticities were computed for both within- and between-component analysis. Findings The results suggest that, in general, reducing within-component inequality significantly reduces overall poverty and inequality in Ghana, compared with between-component inequality. Specifically, inequality in education and health expenditure components were the largest contributors to overall poverty and inequality. The findings imply that policies directed toward reducing within-component inequality will be more effective. Specifically, the findings of the study corroborate recent policies on education and health in Ghana aimed at inequality within these components. Sustaining and scaling up these policies will be a step in the right direction. Originality/value The study contributes to existing studies in several ways: first, this study becomes the first attempt to examine inequality-poverty nexus using household expenditure components in Ghana. Second, the use of expenditure in place of income is an addition to the literature. Income is usually subject to reporting biases and is minimal in expenditure. Finally, the findings highlight the need for poverty reduction strategies to focus on specific household components including education and health. Blanket interventions may not be effective in reducing inequality and poverty.

In this paper, we assess empirically whether financial inclusion contributes to reducing income inequality when controlling for other key factors, such as economic development and fiscal policy. We conclude that financial inclusion contributes to reducing income inequality to a significant degree, while the size of the financial sector does not. Although our results are still preliminary and constrained by data limitations, they still bear significant policy implications. More specifically, fostering financial inclusion has one more important by-product, which had hardly been analyzed yet, namely reducing income inequality. More specifically, given the broad definition of financial inclusion used in our analysis, promoting financial inclusion implies facilitating the use of credit to low-income households, as well as granting credit to small and medium-sized enterprises.

There has been wide interest in private supply of roads as a solution to traffic congestion. We study its efficiency under demand uncertainty: we solve for equilibrium and optimum as benchmarks, and evaluate the efficiency of possible regulatory policies for private road operators. We obtain analytic solutions for simple networks and numerical simulation results for more complex ones. For two serial links and two parallel links, self-financing still holds in expected terms for the first-best case, even though the capacity is higher than the capacity for the deterministic demand equal to the expected value. When forced to apply the second-best optimal pricing, the private supplier makes an expected loss (profit) if there is an untolled substitute (complement) in the network. In contrast to the deterministic counterpart of the problem we study, regulation by competitiv e auction cannot replicate the second-best zero-profit result. For more complex networks, when private firms adds capacity one link at a time, entry by competitive auctions performs better than free entry. For the parameter range considered in the numerical simulation, entry by generalized auction performs better than entry by patronage auction.

Since Aristotle, a vast literature has suggested that economic inequality has important political consequences. Higher inequality is thought to increase demand for government income redistribution in democracies and to discourage democratization and promote class conflict and revolution in dictatorships. Most such arguments crucially assume that ordinary people know how high inequality is, how it has been changing, and where they fit in the income distribution. Using a variety of large, cross-national surveys, we show that, in recent years, ordinary people have had little idea about such things. What they think they know is often wrong. Widespread ignorance and misperceptions of inequality emerge robustly, regardless of the data source, operationalization, and method of measurement. Moreover, we show that the perceived level of inequality – and not the actual level – correlates strongly with demand for redistribution and reported conflict between rich and poor. We suggest that most theories about political effects of inequality need to be either abandoned or reframed as theories about the effects of perceived inequality.

Opportunities in society are commonly interpreted as 'chances of success'. Within this interpretation, should opportunities be equalised? We show that a liberal principle of justice and a limited principle of social rationality imply that opportunity profiles should be evaluated by means of a 'Nash' criterion. The interpretation is new: the social objective should be to maximise the chance that everybody in society succeeds. In particular, the failure of even only one individual must be considered maximally detrimental. We also study a refinement of this criterion and its extension to problems of intergenerational justice. JEL Categories: D63, D70

I define "generous sustainability" as a combination of two conditions: neither instantaneous maximin income nor attainable maximin income should decrease over time. I provide a formal definition and study applications to an AK economy, a Ramsey economy, and a Climate Economy. Generosity is shown to impose substantially stronger conditions on current actions compared to existing sustainability concepts. As a rule of thumb, generosity requires that GHG emissions are limited to levels that do not cause irreversible system damages if some group of people systematically value these systems.

We enrich the choice task of responders in ultimatum games by allow- ing them to independently decide whether to collect what is offered to them and whether to destroy what the proposer demanded. Such a multidimensional response format intends to cast further light on the motives guiding responder behavior. Using a conservative and strin- gent approach to type classification, we find that the overwhelming majority of responder participants choose consistently with outcome- based preference models. There are, however, few responders that destroy the proposer's demand of a large pie share and concurrently reject their own offer, thereby suggesting a strong concern for integrity.

We study minimum cost spanning tree problems for a set of users connected to a source. Prim’s algorithm provides a way of finding the minimum cost tree mm. This has led to several definitions in the literature, regarding how to distribute the cost. These rules propose different cost allocations, which can be understood as compensations and/or payments between players, with respect to the status quo point: each user pays for the connection she uses to be linked to the source. In this paper we analyze the rationale behind a distribution of the minimum cost by defining an a priori transfer structure. Our first result states the existence of a transfer structure such that no user is willing to choose a different tree from the minimum cost tree. Moreover, given a transfer structure, we implement the above solution as a subgame perfect equilibrium outcome of a game where players decide sequentially with whom to connect. Finally, we obtain that the existence of a transfer structure supporting an allocation characterizes the core of the monotone cooperative game associated with a minimum cost spanning tree problem. This transfer structure is called social transfer structure. Therefore, the minimum cost spanning tree emerges as both a social and individual solution. Hernández would like to thank MEC Spain (ECO2013-46550-R) for their financial support and she gratefully acknowledges the Generalitat Valenciana (PROMETEO/2009/068). Silva would like to thank the Generalitat Valenciana (PROMETEO/2009/068) and Peris and Silva gratefully acknowledge financial support from Spanish Ministry of Economy and Competitiveness under Project ECO2013-43119-P.

This paper examines the distributional effects of monetary policy, either standard, nonstandard or both, on income inequality in 10 EA countries over the period 2000-2015. We use three different indicators of income inequality in a Panel VAR setting in order to estimate IRFs of inequality to a monetary policy shock. Results suggest that: (i) the distributional effects of ECB’s monetary policy have been modest and (ii) mainly driven in times of conventional monetary policy measures, especially in peripheral countries, while, overall, (iii) standard and non-standard monetary policies do not significantly differ in terms of impact on income inequality.terms of impact on income inequality.

This paper studies how the request for a favor has to be devised in order to maximize its chance of success. We present results from a mini-dictator game, in which the recipient can send a free-form text message to the dictator before the latter decides. We find that putting effort into the message, writing in a humorous way and mentioning reasons why the money is needed pays off. Additionally, we find differences in the behavior of male and female dictators. Only men react positively to efficiency arguments, while only women react to messages that emphasize the dictator’s power and responsibility.

International audience; Kiyotaki and Wright (1989) model has exerted considerable in ‡uence in the monetary search literature. We argue that the model delivers also important insights on a broader range of macroeconomic and development issues. The analysis studies how market frictions and the liquidity of assets a¤ect the distribution of income. Experiments illustrate how the economy adjusts to shocks to assets' returns and to the matching technology. They also deal with long-run transition. An experiment interprets the reversal of fortune hypothesis as a situation in which an economy with a low-return asset takes over a similar economy with a high-return asset.

International audience; We study Pareto efficient mechanisms in matching markets when the number of agents is large and individual preferences are randomly drawn from a class of distributions, allowing for both common and idiosyncratic shocks. We provide a broad set of circumstances under which, as the market grows large, all Pareto efficient mechanisms—including top trading cycles (with an arbitrary ownership structure), serial dictatorship (with an arbitrary serial order), and their randomized variants—produce a distribution of agent utilities that in the limit coincides with the utilitarian upper bound. This implies that Pareto efficient mechanisms are uniformly asymptotically payoff equivalent “up to the renaming of agents.” Hence, when the conditions of our model are met, policy makers need not discriminate among Pareto efficient mechanisms based on the aggregate payoff distribution of participants.

International audience; In this paper we use cross-state panel data to show a positive and significant correlation between various measures of innovativeness and top income inequality in the United States over the past decades. Two distinct instrumentation strategies suggest that this correlation (partly) reflects a causality from innovativeness to top income inequality, and the effect is significant: for example, when measured by the number of patent per capita, innovativeness accounts on average across US states for around 17% of the total increase in the top 1% income share between 1975 and 2010. Yet, innovation does not appear to increase other measures of inequality which do not focus on top incomes. Next, we show that the positive effects of innovation on the top 1% income share are dampened in states with higher lobbying intensity. Finally, from cross-section regressions performed at the commuting zone (CZ) level, we find that: (i) innovativeness is positively correlated with upward social mobility; (ii) the positive correlation between innovativeness and social mobility, is driven mainly by entrant innovators and less so by incumbent innovators, and it is dampened in states with higher lobbying intensity. Overall, our findings vindicate the Schumpeterian view whereby the rise in top income shares is partly related to innovation-led growth, where innovation itself fosters social mobility at the top through creative destruction.

We examine the measurement of individual poverty in an intertemporal context. Our aim is to capture the importance of persistence in a state of poverty and we characterize a corresponding individual intertemporal poverty measure. Our first axiom requires that intertemporal poverty is identical to static poverty in the degenerate single-period case. The remaining two properties express decomposability requirements within poverty spells and across spells in order to reflect the persistence issue. In addition, we axiomatize an aggregation procedure to obtain an intertemporal poverty measure for societies and we illustrate our new index with an application to EU countries. © 2011 Springer Science+Business Media, LLC

We conduct experiments in which parties face a pair of two-player pie-splitting procedures. Parties submit their strategy in each, their beliefs about their opponent's choices, and are also asked whether they prefer one procedure over the other. The procedures – a yes-no game, an ultimatum game, and a dictator game – are designed such that by all existing economic preference models, whether distributive or procedural, parties should be indifferent between them. In particular, the procedures should yield the same outcomes, the same expected outcomes and carry the same information on parties' intentions. At the same time, the procedures differ in the way they distribute decision and information rights across players, and also in their complexity and efficiency. Experimentally, parties do indeed still reveal preferences over the procedures at hand. To explore why this happens, we elicit individuals' simplicity and efficiency ratings of the procedures, and also the degree by which individuals invoke the equality of basic rights and liberties in their moral judgement – an ethical criterion not yet captured by any preference model. The preferences we find link to this data. We explore formalizations for such preferences.

Social equity is increasingly incorporated as a long-term objective into urban transportation plans. Researchers used accessibility measures to assess equity issues, such as determining the amount of jobs reachable by marginalized groups within a defined travel time threshold and compare these measures across socioeconomic categories. However, allocating public transit resources in an equitable manner is not only related to travel time, but also related to the out-of- pocket cost of transit fares, which can represent a major barrier to accessibility for many disadvantaged groups. Therefore, this research proposes a set of new accessibility measures that incorporates both travel time and transit fares. It then applies those measures to determine whether people residing in socially disadvantaged neighborhoods in Montreal, Canada experience the same levels of transit accessibility as those living in other neighborhoods. Results are presented in terms of regional accessibility and trends by social indicator decile. Travel time accessibility measures estimate a higher number of jobs that can be reached compared to combined travel time and cost measures. However, the degree and impact of these measures varies across the social deciles. Compared to other groups in the region, residents of socially disadvantaged areas have more equitable accessibility to jobs using transit; this is reflected in smaller decreases in accessibility when fare costs are included. Generating new measures of accessibility combining travel time and transit fares provides more accurate measures that can be easily communicated by transportation planners and engineers to policy makers and the public since it translates accessibility measures to a dollar value.

Existing literature on inequality of opportunity (IOp) has failed to address the question as to how the circumstances and choices of spouses in a couple should be treated. By omitting information relevant to the spouse in IOp estimations, the implicit assumption was full responsibility for the partner's income, effort and circumstance variables. In this paper, we discuss whether or not the partner's characteristics should be treated as responsibility factors. Using German micro data, we analyze empirically, how IOp estimates are affected when a partner's circumstance or effort variables are included as own circumstances in the analysis. Our analysis indicates that including spouse's variables can increase IOp measures by more than 20 (35) percent for gross (net) earnings. The less the responsibility assumed for the partner's variables, the higher the IOp estimate.

We address the mechanism design issue for the sequencing problem. We identify the just sequencing rule that serves the agents in the non-increasing order of their waiting costs and prove that it is a Rawlsian rule and that it weakly lexi-max cost dominates the outcome efficient sequencing rule. We identify all ICJ mechanisms that implement the just sequencing rule. The other properties of the just sequencing rule that we identify are the following. It can be implemented with budget-balanced ICJ mechanisms. When waiting cost and processing time are private information, we identify all generalized ICJ mechanisms that ex-post implement the just sequencing rule. Finally, we identify all budget-balanced generalized ICJ mechanisms.

At least since Thomas Piketty's best-selling "Capital in the Twenty-First Century" (2014, Cambridge, MA: The Belknap Press), percentile shares have become a popular approach for analyzing distributional inequalities. In their work on the development of top incomes, Piketty and collaborators typically report top-percentage shares, using varying percentages as thresholds (top 10%, top 1%, top 0.1%, etc.). However, analysis of percentile shares at other positions in the distribution may also be of interest. In this paper I present a new Stata command called -pshare- that estimates percentile shares from individual-level data and displays the results using histograms or stacked bar charts. A shorter version of this paper has been published in The Stata Journal 16(2): 264-300 (see: http://www.stata-journal.com/article.html?article=st0432).

This paper studies the influence of regional inequality within countries on internal conflicts. Regional inequalities are measured by the population-weighted coefficient of variation of regional GDP per capita. As the main innovation, I use a panel dataset of country-level regional inequalities, which covers 56 countries (835 subnational regions) between 1980 and 2009. I also consider a broader cross section dataset for the year 2005, which covers 110 countries (1569 subnational regions). Conflict is measured by the incidence of civil war (UCDP/PRIO data) and a risk measure of internal conflict (war, terrorism and riots) provided by the PRS Group’s International Country Risk Guide. Logit estimations are employed as well as OLS fixed effects panel regressions. I find that regional inequalities increase the risk of internal conflict.

We study the problem of assigning indivisible and heterogenous objects (e.g., houses, jobs, offices, school or university admissions etc.) to agents. Each agent receives at most one object and monetary compensations are not possible. We consider mechanisms satisfying a set of basic properties (unavailable-type-invariance, individual-rationality, weak non-wastefulness, or truncation-invariance). In the house allocation problem, where at most one copy of each object is available, deferred-acceptance (DA)-mechanisms allocate objects based on exogenously fixed objects' priorities over agents and the agent-proposing deferred-acceptance-algorithm. For house allocation we show that DA-mechanisms are characterized by our basic properties and (i) strategy-proofness and population-monotonicity or (ii) strategy-proofness and resource-monotonicity. Once we allow for multiple identical copies of objects, on the one hand the first characterization breaks down and there are unstable mechanisms satisfying our basic properties and (i) strategy-proofness and population-monotonicity. On the other hand, our basic properties and (ii) strategy-proofness and resource-monotonicity characterize (the most general) class of DA-mechanisms based on objects' fixed choice functions that are acceptant, monotonic, substitutable, and consistent. These choice functions are used by objects to reject agents in the agent-proposing deferred-acceptance-algorithm. Therefore, in the general model resource-monotonicity is the «stronger» comparative statics requirement because it characterizes (together with our basic requirements and strategy-proofness) choice-based DA-mechanisms whereas population-monotonicity (together with our basic properties and strategy-proofness) does not.

The authors update previous findings on the total East-West gap in overall life satisfaction and its trend by using data from the German Socio-Economic Panel (SOEP) for the years 1992 to 2013. Additionally, the East-West gap and its trend are separately analyzed for men and women as well as for four birth cohorts. The results indicate that reported life satisfaction is on average significantly lower in East than in West German federal states and that part of the raw East-West gap is due to differences in household income and unemployment status. The conditional East-West gap decreased in the first years after the German reunification and remained quite stable and sizeable since the mid-nineties. The results further indicate that gender differences are small. But the East-West gap is significantly smaller and shows a trend towards convergence for younger birth cohorts.

In experimental partnership dissolution problems with complete information, the divide-and-choose mechanism is significantly superior to the winner's-bid-auction. The performance of divide-and-choose is mainly affected by reciprocity issues and not by bounded rationality. The performance of the winner's-bid-auction is significantly affected by bounded rationality. Contrary to theoretical predicitions divide-and-choose exhibits no first-mover bias.

This paper estimates the impact of economic insecurity on the mental health of Australian adults. Taking microdata from the 2001-2011 HILDA panel survey, we develop a conceptually diverse set of insecurity measures and explore their relationships with the SF-36 mental health index. By using fixed effects models that control for unobservable heterogeneity we produce estimates that correct for endogeneity more thoroughly than previous works. Our results show that exposure to economic risks has small but consistently detrimental mental health effects. The main contribution of the paper however comes from the breadth of risks that are found to be harmful. Job insecurity, financial dissatisfaction, reductions and volatility in income, an inability to meet standard expenditures and a lack of access to emergency funds all adversely affect health. This suggests that the common element of economic insecurity (rather than idiosyncratic phenomena associated with any specific risk) is likely to be hazardous. Our preferred estimates indicate that a standard deviation shock to economic insecurity lowers an individual's mental health score by about 1.4 percentage points. If applied uniformly across the Australian population such a shock would increase the morbidity rate of mental disorders by about 1.7%.

In this paper I study the impact of increasing longevity on pay-as-you-go pension systems. First, I show that increasing longevity increases the internal rate of return. The size of the effect differs for different policy regimes. It is higher for the case where the retirement age is increased to keep the system in balance than for the case where the necessary adjustment is achieved by reducing pension benefits. Second, I study optimally chosen retirement decisions and I show that the socially optimal policy involves a shorter working life than the private optimum. The social optimum can be implemented by the use of a PAYG system that combines an actuarial and a flat pension.

Despite the large increases in economic inequality since 1970, American survey respondents exhibit no increase in support for redistribution, contrary to the predictions from standard theories of redistributive preferences. We replicate these results but further demonstrate substantial heterogeneity by demographic group. In particular, the two groups that have most moved against income redistribution are the elderly and African Americans. We find little evidence that these subgroup trends are explained by relative economic gains or growing cultural conservatism, two common explanations. We further show that the trend among the elderly is uniquely American, at least relative to other developed countries with comparable survey data. While we are unable to provide definitive evidence on the cause of these two groups’ declining redistributive support, we provide additional correlations that may offer fruitful directions for future research on the topic. One story consistent with the data on elderly trends is that older Americans worry that redistribution will come at their expense, in particular through cuts to Medicare. We find that the elderly have grown increasingly opposed to government provision of health insurance and that controlling for this tendency explains about 40 percent of their declining support for redistribution. For blacks, controlling for their declining support for race-targeted aid explains nearly 45 percent of their differential decline in redistributive preferences, which raises a further question: Why has support for race-targeted aid fallen during a period when black economic catch-up to whites has stalled?

How to determine if a population group has better overall (multidimensional) health status than another is a central question in the health and social sciences. We apply a multidimensional first order dominance concept that does not rely on assumptions about the relative importance of each dimension. In particular, we show how one can explore the “depth” of dominance relations by gradually refining the health dimensions to see which dominance relations persist. We analyze a Danish health survey with many health indicators. These are initially collapsed into a single composite health dimension and then refined to four, seven, and ten health dimensions, each representing an (increasingly refined) area of health. Overall we find that younger age groups dominate older age groups in up to four dimensions, but no dominance relations are present with a more refined view of health. Comparing education groups, we often see dominance relations in four and seven dimensions, but the depth of the dominance vary considerably. We also compare groups based on gender, marital status, region, and ethnicity, where we generally find less dominance relations. Our empirical illustration shows that it is possible to operationalize and meaningfully apply the multidimensional first order dominance concept with gradual refinements of health status in up to ten health dimensions.

A correlation curve is introduced as a tool to study the degree of intergenerational income mobility, i.e. how income status is related between parents and adult child. The method overcomes the shortcomings of the elasticity of children’s income with respect to parents’ income (i.e. its sensitiveness to different dispersion among the generations) and the correlation coefficient (i.e. its inability to capture nonlinearities). The method is particularly suitable for comparative studies and in this study labour earnings are compared to disposable income. The correlation between the parental income and the child’s adult disposable income becomes stronger for higher percentiles in the income distribution of the parents. Above the median the correlation is found to be stronger than for labour earnings. Interestingly, the elasticity is higher for labour earnings for most part of the distribution and complementing the elasticity with correlation curves provides a much more complete picture of the intergenerational income mobility.

Ce Working Paper fait l'objet d'une publication in Quantitative Economics, RefBibliographique : Frank A. Cowell, Emmanuel Flachaire. Measuring mobility. Quantitative Economics, Christopher Taber, 2018, 9 (2), pp.865-901. 〈http://qeconomics.org/ojs/index.php/qe/article/view/610〉. 〈hal-01890113〉; Our new approach to mobility measurement involves separating out the valuation of positions in terms of individual status (using income, social rank, or other criteria) from the issue of movement between positions. The quantification of movement is addressed using a general concept of distance between positions and a parsimonious set of axioms that characterise the distance concept and yield a class of aggregative indices. This class of indices induces a superclass of mobility measures over the different status concepts consistent with the same underlying data. We investigate the statistical inference of mobility indices using two well-known status concepts, related to income mobility and rank mobility.

Les réformes structurelles engagées en France ont une grande cohérence. Elles visent à développer un nouveau modèle économique et un nouveau modèle social basés sur le développement de l’entrepreneuriat et une individualisation des parcours professionnels censés favoriser l’innovation et la croissance en rupture radicale avec ce qui est parfois désigné comme l’ancien monde. L’analyse et l’expérience rappellent à une certaine réalité de l’entreprise et de la finance et conduisent à formuler un diagnostic moins optimiste faisant craindre une montée du dualisme au sein de la société allant à l’encontre du but recherché.

We study Pareto efficient mechanisms in matching markets when the number of agents is large and individual preferences are randomly drawn from a class of distributions, allowing for both common and idiosyncratic shocks. We provide a broad set of circumstances under which, as the market grows large, all Pareto efficient mechanisms - including top trading cycles (with an arbitrary ownership structure), serial dictatorship (with an arbitrary serial order), and their randomized variants - produce a distribution of agent utilities that in the limit coincides with the utilitarian upper bound. This implies that Pareto efficient mechanisms are uniformly asymptotically payoff equivalent "up to the renaming of agents." Hence, when the conditions of our model are met, policy makers need not discriminate among Pareto efficient mechanisms based on the aggregate payoff distribution of participants.

The principal dominance concept for inequality-averse multidimensional social welfare comparisons, commonly known as lower orthant dominance, entails less or equal mass on all lower hyperrectangles of outcomes. Recently, it was shown that bivariate lower orthant dominance can be characterized in terms of two elementary mass transfer operations: diminishing mass transfer (reducing welfare) and correlation-increasing switches (increasing inequality). In this paper we provide a constructive algorithm, which decomposes the mass transfers into such welfare reductions and inequality increases.