Aroop Chatterjee, Léo Czajka, Amory Gethin, 24 April 2021

Many studies have investigated the dynamics of poverty and consumption in developing countries, but still little is known about the distribution of household net worth. This column documents the persistence of extreme wealth inequalities in South Africa since the end of the apartheid regime. Today, the top 10% own about 85% of total wealth and the top 0.1% own close to one third. A progressive wealth tax targeted at the richest 1% could collect the equivalent of between 1.5% and 3.5% of South Africa’s GDP, both tackling this legacy of extreme inequality and bringing additional government revenue in the wake of the COVID-19 crisis.

Stefano Filauro, Georg Fischer, 17 April 2021

Inequality in the EU has traditionally been analysed either at the individual country level or in terms of the average of country trends, but attention is now shifting to the analysis of inequality between all citizens across individual member states. Using income survey data, this column shows that that inequality among EU citizens is significantly lower than among US citizens, but slightly higher than in countries with established welfare models such as Australia and Japan. This and other findings may be useful in identifying the most effective policy path to address inequality at the EU level.

Bruno Caprettini, Lorenzo Casaburi, Miriam Venturini, 01 April 2021

In the aftermath of World War II, the 1950 Italian land reform expropriated wealthy landowners and redistributed their land among rural workers, with substantial and long-lasting electoral rewards for the initiating Christian Democratic Party. The electoral effects of the reform were visible even 40 years later, arguably because the reform strengthened local Christian Democratic grassroots organisations and because Christian Democratic governments continued to invest in reform towns. The episode offers insights into the persistence of the electoral benefits of redistribution.

Joshua Hausman, Paul W. Rhode, Johannes Wieland, 29 November 2020

Like the current economic crisis in the US, the Great Depression led to large redistributions of income among sectors and households. Perhaps most important, falling farm product prices shifted income away from farmers. This column argues that this redistribution explains between 10% and 30% of the US output decline in 1930. Recovery from the Great Depression began in 1933 in part because farm product prices rose, reversing this redistribution. 

Antoine Bozio, Bertrand Garbinti, Jonathan Goupille-Lebret, Malka Guillot, Thomas Piketty, 18 November 2020

How much can redistribution policies account for long-run changes in inequality? This column reveals that the reduction of inequality implied by redistribution is significant in France and the US and increased throughout the entire 20th century, but pre-tax income inequality appears to be the main factor accounting for the differential levels and trends in the two countries. These findings suggest that policy discussions on inequality should pay more attention to policies affecting pre-tax inequality and should not focus exclusively on redistribution.

Martin Ravallion, 26 October 2020

At times, ‘ending poverty’ may seem to be nothing more than a ‘symbolic’ goal, with little done to achieve the aim. This column provides a short history of the idea of ending poverty as a ‘motivational’ goal, from the intellectual germ of the modern idea of distributive justice in the late 18th century to the UN’s first Sustainable Development Goal of ending “extreme poverty” globally by 2030. It argues that the path to attaining SDG1 calls for some combination of economic growth, especially when fuelled by pro-poor technical progress, and pro-poor redistribution, but huge challenges lie ahead in how to manage the likely tradeoffs between the ‘social’ and ‘environmental’ SDGs.

Ken Mayhew, Samuel Wills, 18 June 2020

Inequality within most developed countries is higher today than it was 30 years ago. Growth in emerging economies has reduced inequality between nations, but the benefits have been unevenly spread within those economies. This column analyses what has happened, why we should care, and what can be done about inequality. Governments have not focused enough on pre-market policies that prevent inequality arising in the first place. Post-market interventions should be seen as too little, too late. Instead, we need a call-to-arms for governments to re-focus on the deep underlying drivers of inequality.

Jonathan Heathcote, Andrew Glover, Dirk Krueger, Víctor Ríos-Rull, 26 April 2020

Large portions of many countries’ economies have been shuttered to slow the spread of COVID-19. Why, three months into the pandemic, does the optimal policy response remain so controversial? This column examines how the welfare effects of shutdown policies vary across different types of households. The model predicts that some groups – young workers in sectors deemed non-essential – would benefit from ending the current shutdown, while others – the old – will surely lose. Current disagreements over when to end shutdowns are thus easy to understand.

Jack Favilukis, Pierre Mabille, Stijn Van Nieuwerburgh, 18 October 2019

Housing affordability is a leading challenge for local policymakers around the world, yet a coherent framework for analysing the various policy options is lacking. This column builds such a framework and uses it to show that policies that make affordable housing more efficient, that expand rent control, and that increase vouchers have a redistributive effect. Upzoning policies creates smaller, but more uniformly distributed benefits.

Alberto Alesina, Elie Murard, Hillel Rapoport, 08 April 2019

A large literature shows that generosity, both public and private, is more freely extended within the same group rather than across groups. This column examines how immigration affects natives’ attitudes towards redistribution and the implications for welfare states in Europe. The main finding is that in regions which have received a larger share of immigrants, natives are in general less favourable towards redistribution. Some European countries face the dilemma of natives favouring generous welfare policies for themselves but opposing them for immigrants.

Richard Blundell, Ian Preston, 25 January 2019

Sir James Mirrlees, co-recipient of the 1996 Nobel Memorial Prize in Economic Sciences, passed away in August 2018. This column outlines how his work has transformed economists’ understanding of their discipline – from the principles of tax design to the theory of contracts and beyond. By conceiving of policy questions in terms of information asymmetries between governments and taxpayers, Mirrlees demonstrated how to conduct convincing analysis of redistributive objectives together with incentive effects in the design of general tax systems and public policy more broadly. His ability to simplify complex problems in ways that reveal their tractable essence means that his work has yielded insights that have reverberated throughout the discipline. It has also proved highly fruitful for practical policy design.

Assaf Razin, Efraim Sadka, 08 July 2018

Financial globalisation triggers tax competition among countries and the possibility of a ‘race to the bottom'. This can chip away at the domestic tax base, and the reallocation of international capital is likely to result in the downscaling of the scope and size of redistribution under the welfare state. This column argues, however, that even a reduced welfare state can still act as a device to compensate the losers from financial globalisation losers in a Pareto-improving way. 

Alessandra Casarico, Giovanni Facchini, Tommaso Frattini, 28 June 2018

European countries have recently experienced an extraordinary inflow of asylum seekers. Using a theoretical framework and US data, this column studies the key economic triggers which prompt policymakers to implement immigration legalisation programmes. It shows that the more restricted the occupational opportunities of undocumented immigrants and the smaller the fiscal leakage to undocumented immigrants via the welfare state, the more desirable an amnesty is. 

Samuel Bazzi, Martin Fiszbein, Mesay Gebresilasse, 23 December 2017

More Americans than Europeans oppose redistribution and government intervention in areas such as healthcare, gun control, the minimum wage, and pollution control. This column argues that the longstanding American culture of 'rugged individualism' is rooted in the history of the frontier. Even accounting for individual-level support for the Republican Party, areas in the US with greater historical frontier experience still exhibit greater opposition to redistribution and government regulation today.

Peter Lindert, 20 November 2017

There has been a blossoming of research into fiscal incidence by income class. This column combines century-long histories for Britain and South American countries with previous research to offer a global history of government income redistribution. Contrary to some allegations, the shift towards progressivity in government budgets over the last 100 years has not been reversed since the 1970s. The rise in inequality since the 1970s therefore appears to owe nothing to a net shift government redistribution toward the rich.

Marta Auricchio, Emanuele Ciani, Alberto Dalmazzo, Guido de Blasio, 01 September 2017

The nature of the relationship between public and private employment is ambiguous, with studies showing that increased public employment can have both crowding-in and crowding-out effects on private employment. This column explores this relationship across Italian municipalities. It finds evidence of strong crowding-out effects across municipalities, which is partially explained by increased competition in the housing market.

Alberto Alesina, Stefanie Stantcheva, Edoardo Teso, 21 June 2017

Americans are generally thought to view the economic system as fair and see wealth as a reward for ability and effort, while Europeans tend to believe that the economic system is unfair, and that wealth is the result of circumstances. This column tests this using new evidence on beliefs about intergenerational mobility in four European countries and the US, and confirms that Europeans do indeed tend to be overly pessimistic about moving up the social ladder compared to reality, while Americans are overly optimistic. These perceptions have important implications for how redistribution and equal opportunity policies will be received.

Johanna Wallenius, Max Groneck, 01 June 2017

At the individual level, social security is a strong source of redistribution from rich to the poor in the US, due to the concavity of the pension formula. But this column argues that spousal and survivor benefits, which are important sources of retirement income for women, introduce regressive redistributive elements to social security and also provide incentives for even highly educated women to stay at home if they are married to a high earner. A means-tested minimum benefit would simultaneously increase overall labour supply and reduce inequality, compared to the current system.

Enrico Perotti, 04 April 2017

The members of the Eurozone are diverse in terms of their institutional quality. This column outlines the redistributive effects created by the rigid structure of a monetary union next to its direct effects on monetary credibility, and highlights the general equilibrium benefits that core countries draw from it and the cost paid by the productive sector in ‘weaker’ countries. Europe faces a clear challenge, but the success of the transition to the banking union suggests that collective efforts towards institutional evolution can succeed.

Paolo Pasimeni, Stéphanie Riso, 19 January 2017

EU budget reform is a key issue in policy debates, in particular the redistributive effects between member states. This column assesses redistribution within the EU budget over the period 2000 to 2014. It finds that the net redistributive impact of the EU budget is rather small and, contrary to common belief, that the revenue side is more progressive than the expenditure side.

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