The Determinants of Redistribution Around The World

Jäntti, Markus; Pirttilä, Jukka; Rönkkö, Risto

doi:10.1111/roiw.12406

Cited by 16 publications

(12 citation statements)

References 36 publications

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“…I hypothesize that countries with greater genetic distance to the world frontier of egalitarian income distribution tend to suffer from higher levels of income inequality, holding other things equal. The central hypothesis of this article rests upon the argument that redistributive policies and measures, including progressive taxes, transfers, and social benefits, are important for reducing income inequality (Milanovic, 2000;Houle, 2017;Ja ¨ntti et al, 2020;Vu, 2022). On this basis, genetic distance, by widening the divergence in intergenerationally transmitted traits between countries, hampers the cross-border diffusion of redistributive policies and measures, leading to greater income disparities within a country.…”

Section: Introductionmentioning

confidence: 99%

Long-term relatedness and income distribution: understanding the deep roots of inequality

2022

Oxford Economic Papers

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This article explores the role of long-term relatedness between countries, captured by an index of genetic distance, in driving worldwide differences in income inequality. The main hypothesis is that genetic distance gives rise to barriers to the international diffusion of redistributive policies and measures, and institutions, leading to greater income disparities. Using cross-country data, I consistently find that countries that are genetically distant to Denmark—the world frontier of egalitarian income distribution—tend to suffer from higher inequality, ceteris paribus. I also demonstrate that genetic distance is associated with greater bilateral differences in income inequality between countries. Employing data from the European Social Survey, I document that second-generation Europeans descending from countries with greater genetic distance to Denmark are less likely to exhibit positive attitudes towards equality. Further evidence suggests that effective fiscal redistribution is a key mechanism through which genetic distance to Denmark transmits to greater income inequality.

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Section: Introductionmentioning

confidence: 99%

Long-term relatedness and income distribution: understanding the deep roots of inequality

2022

Oxford Economic Papers

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“…The results are robust to the exclusion of this variable. Thus, potential biases arising from the similarity of the dependent variable and the right-hand side variable on market-based Gini-coefficient as suggested byJäntti et al (2018) do not exist in our framework.…”

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confidence: 96%

The effects of economic globalisation and ethnic fractionalisation on redistribution

Pleninger

Sturm

2020

World Development

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We examine the effect of economic globalisation on income redistribution and hypothesise that it depends on ethnic fractionalisation. In highly fractionalised countries, powerful ethnicities are able to extract globalisation-induced benefits, whereas their governments face substantial political obstacles when redistributing income between ethnic groups. Using the newly constructed KOF Globalisation Index, we find supportive evidence for the interactive effect of ethnic fractionalisation and de jure financial globalisation on redistribution. In particular, the total effect of de jure financial globalisation on redistribution is negative in highly fractionalised countries. Governments in these countries are apparently not only reluctant to offset potential consequences stemming from de jure financial globalisation, but they even reduce redistribution to lower levels.

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“…Finland has a strong redistributive income transfer system, especially when compared to other systems like the United States (see e.g., Autor et al, 2005;Dew-Becker & Gordon, 2005;Goldin & Katz, 2007). Thus, the redistributive income transfer system through progressive taxation and cash transfers through social insurance and social benefits could be one factor that partly mellows differences between these two groups (see also Fellman et al, 1999;Jäntti et al, 2020). The stagnant gap could tell us that this redistributive system has been working as intended for a long period of time, and at the surface level, it seems that long-term economic opportunities have been balanced for both high-and low-income groups and that growth trends are at similar levels.…”

Section: Discussionmentioning

confidence: 99%

Necessity-Rich, Leisure-Poor: The Long-Term Relationship Between Income Cohorts and Consumption Through Age-Period-Cohort Analysis

Karonen

Niemelä

2021

J Fam Econ Iss

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The main aim of this study is to analyse household consumption patterns in the highest and lowest income quintiles and explore how they have changed over time and generations. Thus, the article explores whether social inclusivity through consumption has truly increased. This study utilises the cross-sectional time-series data of the Finnish Household Expenditure Surveys (HESs), covering the period 1966–2016. We use the Age-Period-Cohort Gap/Oaxaca (APCGO) model with logitrank dependent variables as the main statistical method. Our results indicate that an overall high income is advantageous with respect to income and spending, though the gap between high- and low-income groups has remained stagnant over cohorts. A more in-depth analysis reveals that the expenditure gap, in terms of necessities, food, and groceries consumption, has narrowed. Instead, income elastic-oriented spending on culture and leisure time has significantly increased in the high-income group, where the expenditure gap has expanded 60 percentage points over the cohorts. Simply put, expenditures on necessities have become more inclusive, but low-income groups are increasingly more ‘leisure-poor’. Overall, high-income classes are spending an increasing amount of money on culture and leisure time over cohorts.

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The Determinants of Redistribution Around The World

Cited by 16 publications

References 36 publications

Long-term relatedness and income distribution: understanding the deep roots of inequality

Long-term relatedness and income distribution: understanding the deep roots of inequality

The effects of economic globalisation and ethnic fractionalisation on redistribution

Necessity-Rich, Leisure-Poor: The Long-Term Relationship Between Income Cohorts and Consumption Through Age-Period-Cohort Analysis

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