Our analysis of US state-level data on an annual frequency, from 1976 to 2008, sheds new light on a plausible causal link between infrastructure investments, namely public spending on highways, and income inequality. This causal relationship is drawn out using the number of seats in the US House of Representatives Committee on Appropriations (HRCA) as an instrument to identify quasi-random variations in state-level spending on highways. An exogenous pattern which emerges when a state gains an additional member to the HRCA is that it is allocated with new federal grants. This increase in federal transfers for infrastructure financing results in slashing of expenditures on highways and a crowding-out effect of federal funding for state investments on highways. Spending cuts on highways produced by a new HRCA member being attained by a state can unwittingly cause income inequality to rise over a short 2-year time horizon. Similar challenges with decentralized development to finance infrastructure via federal transfers to state and sub-national governments may be encountered by other industrially advanced, emerging and low-income developing economies. US data over the mentioned period reveal a strong positive correlation with state spending on highways and wages paid for construction jobs. Suggestive evidence indicates that the construction sector also plays an important role in the transmission channel from a rise in state spending on highways to lowering income inequality, albeit during specific intervals, as opposed to on a long-term basis.
This article establishes an equivalence between four incomplete rankings of distributions of income among agents who are vertically differentiated with respect to some nonincome characteristic (health, household size, etc.). The first ranking is the possibility of going from one distribution to the other by a finite sequence of income transfers from richer and more highly ranked agents to poorer and less highly ranked ones. The second ranking is the unanimity among utilitarian planners who assume that agents' marginal utility of income is decreasing with respect to both income and the source of vertical differentiation. The third ranking is the Bourguignon (Journal of Econometrics, 42 (1989), 67-80) Ordered Poverty Gap dominance criterion. The fourth ranking is a new dominance criterion based on cumulative lowest incomes.
The liberated company—a company where employees are fully autonomous and accountable for the decisions they take—is a concept about which much has been said and written. Some observers portray it as a major managerial innovation and even as a fully-fledged organizational model for the future. Yet, despite constituting an interesting attempt to address issues related to the changing values and expectations of employees at work, the concept seems more cosmetic than something that will have a significant managerial effect. A clearly better approach is to ask what role managers should adopt, rather than fomenting the idea that the need for management is on the cusp of disappearing altogether. Adopting a more anthropological vision of the company, we suggest instead that a conceptual revision informed by a postmodern reading of this issue, suggests a new way of rethinking managerial attitudes. The main idea here being to no longer try and liberate companies, but instead to lay the foundations so that they themselves become liberating.
This paper assesses the effectiveness of risk sharing mechanisms in Europe by breaking down the factor income components into their sub-components, and aims to further examine whether financial integration and international portfolio diversification boosts or dampens risk sharing. Using a panel of European countries, we compare the years before and after the 2008 financial crisis. We extend the literature by properly taking into account the heterogeneity (in both country and time dimensions) in the panel through new econometric models. Our results show that financial income has become a major channel of risk sharing in recent years and that a higher integration in the bond and equity markets significantly improves risk sharing in the long term.
In this paper, we consider an abstract optimal control problem with state constraint. The methodology relies on the employment of the classical dynamic programming tool considered in the infinite dimensional context. We are able to identify a closed-form solution to the induced Hamilton-Jacobi-Bellman (HJB) equation in infinite dimension and to prove a verification theorem, also providing the optimal control in closed loop form. The abstract problem can be seen an abstract formulation of a PDE optimal control problem and is motivated by an economic application in the context of continuous spatiotemporal growth models with capital di usion, where a social planner chooses the optimal location of economic activity across space by maximization of an utilitarian social welfare function. From the economic point of view, we generalize previous works by considering a continuum of social welfare functions ranging from Benthamite to Millian functions. We prove that the Benthamite case is the unique case for which the optimal stationary detrended consumption spatial distribution is uniform. Interestingly enough, we also find that as the social welfare function gets closer to the Millian case, the optimal spatiotemporal dynamics amplify the typical neoclassical dilution population size effect, even in the long-run.
Disparities in physicians' geographical distribution lead to highly unequal access to healthcare, which may impact quality of care in both high and low-income countries. This paper uses a 2013-2014 nationally representative survey of French general practitioners (GPs) matched with corresponding administrative data to analyze the effects of practicing in an area with weaker medical density. To avoid the endogeneity issue on physicians' choice of the location, we enriched our variable of interest, practicing in a relatively underserved area, with considering changes in medical density between 2007 and 2013, thus isolating GPs who only recently experienced a density decline (identifying assumption). We find that GPs practicing in underserved areas do shorter consultations and tend to substitute time-consuming procedures with alternatives requiring fewer human resources, especially for pain management. Results are robust to considering only GPs newly exposed to low medical density. Findings suggest a significant impact of supply-side shortages on the mix of healthcare services used to treat patients, and point to a plausible increased use of painkillers, opioids in particular.
I develop a model of activism and polarization in the context of electoral competition. Two candidates simultaneously announce policy platforms and seek the support of ideologically inclined activists. Activists compete to influence electoral outcomes by expending costly support for their respective candidates. The presence of activists always moderates the platform choice of candidates, compared to the case of no activism. The central finding of the paper is that the relationship between partisanship of activists and polarization isambiguous. As activists become increasingly partisan, polarization of candidate platforms reduces or widens depending on the costs of activism. I present normative conditions under which the presence of activism and increased partisanship among activists are both welfare-improving for voters. Finally, introducing a public funding option for candidates increases polarization in the political process.
We consider an overlapping generations economy in which agents differ through their ability to procreate. Ex-ante infertile households may incur health expenditure to increase their chances of parenthood. This health heterogeneity generates welfare inequalities that deserve to be ruled out. We explore three different criteria of social evaluation in the long-run: the utilitarian approach, the ex-ante egalitarian criterion and the ex-post egalitarian one. We propose a set of economic instruments to decentralize each solution. To correct for the externalities and health inequalities, both a preventive (a taxation of capital) and a redistributive policy are required. We show that a more egalitarian allocation is associated with higher productive investment but reduced health expenditure and thus, lower population growth.
There is an urgent need to measure the impacts of COVID-19 among gay men and other men who have sex with men (MSM). We conducted a cross-sectional survey with a global sample of gay men and other MSM (n = 2732) from April 16, 2020 to May 4, 2020, through a social networking app. We characterized the economic, mental health, HIV prevention and HIV treatment impacts of COVID-19 and the COVID-19 response, and examined whether sub-groups of our study population are disproportionately impacted by COVID-19. Many gay men and other MSM not only reported economic and mental health consequences, but also interruptions to HIV prevention and testing, and HIV care and treatment services. These consequences were significantly greater among people living with HIV, racial/ethnic minorities, immigrants, sex workers, and socio-economically disadvantaged groups. These findings highlight the urgent need to mitigate the negative impacts of COVID-19 among gay men and other MSM.
City size distributions are not strictly Pareto, but upper tails are rather Pareto like (i.e. tails are regularly varying). We examine the properties of the tail exponent estimator obtained from ordinary least squares (OLS) rank size regressions (Zipf regressions for short), the most popular empirical strategy among urban economists. The estimator is then biased towards Zipf's law in the leading class of distributions. The Pareto quantile-quantile plot is shown to offer a simple diagnostic device to detect such distortions and should be used in conjunction with the regression residuals to select the anchor point of the OLS regression in a data-dependent manner. Applying these updated methods to some well-known data sets for the largest cities, Zipf's law is now rejected in several cases.