Lubrano
Michel Lubrano
Publications
The log-normal distribution is convenient for modelling the income distribution, and it offers an analytical expression for most inequality indices that depends only on the shape parameter of the associated Lorenz curve. A decomposable inequality index can be implemented in the framework of a finite mixture of log-normal distributions so that overall inequality can be decomposed into within-subgroup and between-subgroup components. Using a Bayesian approach and a Gibbs sampler, a Rao-Blackwellization can improve inference results on decomposable income inequality indices. The very nature of the economic question can provide prior information so as to distinguish between the income groups and construct an asymmetric prior density which can reduce label switching. Data from the UK Family Expenditure Survey (FES) (1979 to 1996) are used in an extended empirical application.
We provide a Bayesian inference for a mixture of two Pareto distributions which is then used to approximate the upper tail of a wage distribution. The model is applied to the data from the CPS Outgoing Rotation Group to analyze the recent structure of top wages in U.S. from 1992 through 2009. We found enormous earnings inequality between the very highest wage earners (“the superstars”), and the other high wage earners. These findings are largely in accordance with the alternative explanations combining the model of super-stars and the model of tournaments in hierarchical organization structure. The approach can be used to analyze the recent pay gaps among top executives in large firms so as to exhibit the “superstar” effect.
We develop Bayesian inference for an unconditional quantile regression model. Our approach provides better estimates in the upper tail of the wage distribution as well as valid small sample confidence intervals for the Oaxaca–Blinder decomposition. We analyze the recent changes in the US wage structure using data from the CPS Outgoing Rotation Group from 1992 to 2009. We find that the largest part of the recent changes is explained mainly by differences in returns to education while the decline in the unionization rate has a small impact, and that earnings inequality is rising more at the top end of the wage distribution.
The theory of human capital is one way to explain individual decisions to produce scientific research. However, this theory, even if it reckons the importance of time in science, is too short for explaining the existing diversity of scientific output. The present paper introduces the social capital of Bourdieu (1980), Coleman (1988) and Putnam (1995) as a necessary complement to explain the creation of scientific human capital. This paper connects these two concepts by means of a hierarchical econometric model which makes the distinction between the individual level (human capital) and the cluster level of departments (social capital). The paper shows how a collection of variables can be built from a bibliographic data base indicating both individual behaviour including mobility and collective characteristics of the department housing individual researchers. The two level hierarchical model is estimated on fourteen European countries using bibliometric data in the fields of economics.
Using French data, we show that ELIE performs rather weakly when it comes to addressing the issue of poverty. Yet, eliminating poverty is also a valid normative property of any redistribution mechanism. We suggest combining ELIE with another redistributive solution aimed specifically at alleviating poverty: the personal allowance (PERAL) mechanism (Leroux 2004 and 2007). We argue that ELIE and the PERAL mechanism, more than being compatible, are in fact complementary.
Van Parijs (1995) with basic income and Kolm (2005) with ELIE transfers have both revisited the ethical foundations and the redistributive patterns of the tax system. Despite being formally close, both propositions diverge because the financing of basic income is not really guaranteed and the treatment by ELIE transfers of “eccentric productive people” who choose not to work is not obvious. Both projects remain nevertheless compatible: from a philosophical point of view, Van Parijs tries to equalise individuals’ “external endowments”, while Kolm exploits only their “internal endowments”; from an economic point of view, TECIE transfers which would be based on “external endowments” could thus complete ELIE transfers stemming from “internal endowments”. The first examination of this “hybridisation” provides the framework of our conclusion.
The ELIE scheme of Kolm taxes labour capacities instead of labour income in order to circumvent the distortive effect of taxation on labour supply. Still, Kolm does not study the impact of ELIE on human capital formation and investment. In this paper, we build an overlapping generations (OLG) model with heterogenous agents and endogenous growth driven by investment in human capital. We study the effect of ELIE on education investment and other aggregate economic variables. Calibrating the model to French data, we highlight a trade-off between growth and redistribution. With a perfect credit market, ELIE is successful in reducing inequalities and poverty, but it is at the expense of lower investment in education and slower growth. In an economy with an imperfect credit market where individuals cannot borrow to educate, the trade-off between growth and redistribution is not overturned but is less severe. However, it is possible to overturn completely that trade-off simply by changing the base of taxation for the young generation which is equivalent to subsidising education.
The ELIE scheme of Kolm taxes labour capacities instead of labour income in order to circumvent the distortive effect of taxation on labour supply. Still, Kolm does not study the impact of ELIE on human capital formation and investment. In this paper, we build an overlapping generations (OLG) model with heterogenous agents and endogenous growth driven by investment in human capital. We study the effect of ELIE on education investment and other aggregate economic variables. Calibrating the model to French data, we highlight a trade-off between growth and redistribution. With a perfect credit market, ELIE is successful in reducing inequalities and poverty, but it is at the expense of lower investment in education and slower growth. In an economy with an imperfect credit market where individuals cannot borrow to educate, the trade-off between growth and redistribution is not overturned but is less severe. However, it is possible to overturn completely that trade-off simply by changing the base of taxation for the young generation which is equivalent to subsidising education.
This paper analyses the problems linked to the implementation of the Equal Labour Income Equalisation (ELIE) scheme proposed by [Kolm, 2005]. It successively studies the influence of uncertainty in the information about individual incomes, the impact of equivalence scales and finally the consequences of capital accumulation. If uncertainty does not modify fundamentally the equity properties of ELIE, equivalence scales can have non trivial consequences depending on the relation between income and fertility. Finally, capital accumulation introduces strong inequalities in the income distribution which are not removed by taxation. The paper relies on simulations of the income distribution, calibrated on French data and on the use of taxation indices.
